TOWIE, Love Island and Geordie Shore stars are all set to face court after being charged in relation to an Instagram “scam”.
The Financial Conduct Authority (FCA) has charged a string of influencers for promoting alleged unauthorised investments.
This is part of a crackdown by the watchdog on “financial influencers” (or “finfluencers”) who are alleged to be posting misleading content.
Those named in the court case include Towie’s Lauren Goodger and Yazmin Oukhellou, Love Island’s Biggs Chris, Eva Zapico, Rebecca Gormley and Jamie Clayton, and Geordie Shore’s Scotty T.
All of the above named are accused of being paid to promote account @holly_fxtrends on Instagram, a foreign exchange trading scheme run by Mr Emmanuel Nwanze and Ms Holly Thompson.
The FCA claims the account gives advice on buying and selling “contracts for difference” investments used to bet on foreign currencies, without authorisation from them.
Contracts For Difference (CFDs) are high-risk derivatives. they are often highly leveraged, which means they use debt to try and amplify returns, which can result in investors losing more than they invested.
This often results in 80% of their customers losing money as they weren’t aware they were involved in a high-risk derivative.
In the UK, the FCA has imposed restrictions on how CFDs and CFD-like options can be sold and marketed to retail customers. The FCA has been carrying out work to address consumer harm in the UK in this sector.
Mr Nwanze, Ms Thompson and all the influencers they allegedly paid have been charged with “unauthorised communications of financial promotions”.
Mr Nwanze has the added charge of breaching the Financial Services and Markets Act 2000 which prohibits people from pursuing regulated financial activities without prior authorisation.
The case will be heard at Westminster Magistrates Court on June 13.
If convicted, each person named could face up to two years in prison.
ADVICE from James Flanders, The Sun's Chief Consumer Reporter.
The city watchdog has charged several influencers for promoting risky and unauthorised investments.
Those accused include Lauren Goodger, who rose to fame on The Only Way is Essex, Biggs Chris who appeared on Love Island and Scotty T who was cast in Geordie Shore.
The financial products allegedly touted by the celebs are related to CFDs or contracts for difference.
CFDs are described by the FCA as a ‘high-risk investment product used to bet on the price of an asset’.
In this case, it was claimed to be a bet on foreign currencies.
The FCA has previously said that 80% of customers lose money when investing in CFDs.
If you’ve come across these trading schemes or if you’ve lost money in relation to the matter, you should contact the FCA.
You can do this by calling 0800 111 6768.
