OpinionAug 6 2014

Five anti-social messages from FCA social media rules

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Today (6 August), the FCA published a consultation paper outlining new rules on how you should use social media in order to avoid breaching existing financial promotion rules.

Here is our attempt - in many more than 140 characters - at summarising what the FCA said about posting comments about your business on the likes of Facebook or Twitter alongside photographs of ‘hotdog legs’ and people ‘planking’.

1. Make your Tweets as boring as your disclaimers

Financial promotions for investment products should be identifiable as such, says the FCA.

The watchdog comes up with an idea for how to do this, which appears to be make your Tweets look as long and as boring as the pages of disclaimers you have to hand out after you recommend an investment product. Or rather: just distribute the pages - or the ‘best’ bits - as infographics.

Basically, clearly not understanding that the joy of Twitter is the messages you receive are incredibly short, the FCA states you should add pictures to ensure all the caveats and qualifiers are present and correct.

These infographics are basically small images that do not count towards your character limit but can include text like, “Your home may be repossessed if you do not keep up payments”.

According to the regulator, for character-limited media, you should also use the hashtag #ad for promotions. Don’t be surprised to see this ‘trending’ worldwide pretty soon, then.

(Please post your suggestions for hashtags to describe the FCA’s approach to social media at the bottom of this article.)

2. Fear your Tweets reaching a wider audience

One of the great benefits of social media is widening your ‘circle’ - quite literally on Google+. The FCA fears this.

Firms are told by the FCA to ensure their original communication would remain “fair, clear and not misleading”, even if it ends up in front of a non-intended recipient. This includes through others re-tweeting on Twitter, or sharing on Facebook.

To make sure this doesn’t happen, the FCA encourages you to use software that enables advertisers to target particular groups very precisely.

So, basically, they want you to spend more money on technology. #ad.

3. Just because they ‘like’ you, doesn’t mean they really ‘like’ you

It is a shame that the FCA has to break this to some of you, but just because people ‘like’ or ‘follow’ you doesn’t mean they want you to thrust products down their throats through social media.

Of course, social media is a prime channel for making unsolicited promotions. Who hasn’t been asked if they have been missold PPI? And the FCA gets this, it says.

However, the FCA rules state being a ‘follower’ of your firm on Twitter or ‘liking’ your Facebook page does not in itself constitute ‘an established existing client relationship’, or an ‘express request’ to be inundated with financial promotions.

To borrow dating website terminology, these people may have winked at you but they don’t want you to take them to dinner.

4. Games can cause you trouble too

Were you thinking of sending a link to the latest game to your clients with a cheeky plug for your business? Well, be careful.

Sales messages placed in entertainment and game applications must now meet the FCA’s financial promotion rules.

The regulator highlights ‘advergames’ and warns these could constitute a financial promotion if, for example, the second sentence read: ‘We also invest in our trading technology, to help get you the best returns!’

So, if you want to send a link to Tetris, don’t point out that you can help put another brick in a wall.

5. Don’t worry they will not censor what you say to your friends

The FCA states social media conversations involving groups and individuals not “acting in the course of business” are outside of the financial promotion regulations. Well, that’s a relief.

The regulator’s ‘in the course of business’ test requires a commercial interest on the part of the communicator. It is intended to exclude genuine non-business communications.

So, if you want to use your private Twitter account to ask your best mate down the pub and say, “Shall we make an investment in our local brewery?”, you are safe. According to the FCA, the key factor is the purpose of the communication rather than who is making it.

However, where a personal social media account such as a Twitter account is used by someone associated with a particular business, the FCA warned that the individual and the firm should take care to distinguish clearly personal communications from those that are likely to be understood to be made in the course of that business.