Britain Warns Social Media Firms Against ‘Risky’ Financial Ads
By Huw Jones
LONDON (Reuters) – Social media companies face action if they do not do more to prevent advertisements for “questionable financial promotions” that are fueling an upsurge in fraud, Britain’s Financial Conduct Authority said on Tuesday.
Financial scams have exploded in recent years, especially during the coronavirus pandemic, as more consumers shop online and try out banking services and digital investments.
UK Finance, a lobby group representing banks, has described the fraud as a “threat to national security”, with FCA claiming consumers lost nearly £ 570million to investment scams in the UK. during the 12 months preceding April.
“We inform them that we expect them to be involved in this process of protecting the community,” FCA Chief Enforcement Officer Mark Steward said at its annual meeting.
Big tech companies have said they are investing in fraud prevention and working with government and regulators.
Steward did not give any specific examples of advertisements “feeding social media with questionable financial promotions.”
This month, Google banned investment announcements not authorized by the FCA, including for gold and cryptocurrencies.
Steward said the FCA was happy with the action, which he added “was already having an impact in reducing the increase in suspicious financial promotions on Google searches.”
“We are talking to all social media companies about this and it is important that they change all of their processes and procedures or else we will have to take action,” he added.
Steward said it was too easy for the attackers to hide their identities and be located anywhere in the world.
“This is why the gateway via social media needs to be regulated,” he said.
The FCA has called on the government to include ads in its online mischief bill to help fight scams.
“There is something systemic and fundamentally that needs to be fixed in order to create a safer environment for consumers,” Steward said.
(Reporting by Huw Jones; Editing by Catherine Evans, Alison Williams and Alexander Smith)