The City regulator has warned it will take legal action against Google and social media companies if they continue to accept advertisements for online financial scams that have flourished during the pandemic.
The Financial Conduct Authority’s head of enforcement, Mark Steward, told the Treasury select committee on Monday that the UK had been blocked until recently from taking action against online platforms that failed to screen financial adverts to make sure they were approved by an FCA-authorised firm or individual.
That was due to the fact that EU rules on financial adverts did not extend to online platforms such as Google. This “exception” effectively allowed scammers to post fraudulent adverts online since they did not need to go through extra checks. But the FCA is now free to crack down on rule breakers, Steward said.
“It’s not immediately apparent whether social media were really aware of what this change actually meant. We’ve made them aware,” Steward said. “We now have quite a lot of traction with the social media industry to force change,” he added. If firms fail to comply, “we will take action”.
The warning came a month after the City of London police and the consumer body Which? joined forces to urge the government to make changes to its proposed online safety bill that would ensure tech giants such as Google and Facebook are held legally responsible for fake and fraudulent adverts.
But the FCA’s newly regained powers could be another way…