We all struggle to keep up with the ever changing word of social media. Every few months it seems there’s a new app, system or way of talking to people we know, or for businesses to advertise their services. For a lot of people it can be a real challenge to keep up with the latest trends and know how to use them properly. For those who use these tools as ways to talk to their customers it can be equally confusing.
Rules and regulations have covered this sector for many years, but as with any complicated rule book, it takes time to adapt to the latest developments. There’s a difficult balance to strike between being a slow lumbering regulator and reacting to every new development. Whilst it’s easy to criticise those in charge for taking too long to adapt, just think about how much time and money could have been wasted developing specific rule sets for some of the ‘flash in the pan’ sites – Myspace, Friendster and Buzz are good examples of unique platforms that have all but faded from existence. Each was significant in size with Myspace boasting nearly 76 million users and over 115 million people signed up to Friendster. Regulators could easily have spent years and millions of pounds developing regulations for these sites that would now be defunct.
Today’s challenges are different in some ways and the marketplace now commands a higher level of regulation. Fundamentally though, the key elements are regulating across multiple mediums in an ever changing market and being able to stay current and relevant in that constantly evolving scenario.
The FSA and OFT had set the basic parameters during their reign over consumer credit and the FCA took that to the next level in April 2014. To provide further support to a – often confused – marketplace, the FCA released a consultation over a guidance paper in August 2014. The paper, a copy of which can be found at https://www.fca.org.uk/publications/guidance-consultations/gc14-6-social-media-and-customer-communications-fca%E2%80%99s is intended to support those companies that are actively looking to use social media to advertise to potential customers in a compliant way.
The proposed guidance does not change the world on any medium, nor does it prohibit the use of some of the more ‘challenging’ products (like making a compliant advert in 160 characters or less). Equally, it is very clear that the regulator expects compliance and clear, fair and not misleading communication to come before the sales pitch. Whilst not surprising, this should set a level playing field for every business and provide better outcomes for customers.
There are some concessions to a modern world, particularly with the use of pictures being accepted as a medium for delivering messages where there is a restriction on characters. This could work really well for those advertising on Facebook or Twitter and is a pragmatic solution to the challenges faced by businesses.
Overall, the proposed guidance will help some companies work smarter, or have more faith in what they are doing is acceptable. The biggest challenge may turn out to be monitoring the performance of those companies who don’t want to comply, or who seek an advantage by deliberately not complying. With over 40,000 firms going for full FCA authorisation in the next two years there will be real challenges with staying on top of what we all accept is a vast and rapidly changing environment.