ASIC has published an information sheet (Info 269) about discussing financial products and services online which sets out how the financial services laws apply to ‘finfluencers’ and AFS licensees who use them. ‘Finfluencer’ is the common term for someone engaged to promote financial products through social media platforms such as Facebook, YouTube, Instagram, and TikTok.
Lawyer Claudia Blades warns AFS licensees who use finfluencers may also be liable for their misconduct and need to take precautions.
ASIC warns finfluencers should make sure they understand their legal obligations when discussing financial products and services online, as there are serious risks involved and they could breach of the Corporations Act.
The information sheet highlights some of the legal obligations as follows:
AFS licensees who use finfluencers may also be liable for their misconduct and need to take precautions such as:
The Act imposes significant penalties, including up to five years’ imprisonment for an individual and financial penalties into the millions of dollars for a corporation.
The law also prohibits conduct that is misleading or deceptive, or is likely to mislead or deceive, in relation to financial products or services. A finfluencer does not need to be licensed to breach the misleading or deceptive provisions.
Contact our team if you are unsure of your obligations.