Social media firms must do more to stop advertising “dodgy financial promotions” that fuel a surge in fraud or face action, Britain’s Financial Conduct Authority said on Tuesday.
“We are putting them on notice that we expect them to be involved in this process of protecting the community,” the FCA’s head of enforcement Mark Steward told the watchdog’s annual meeting.
He gave no specific examples of what he described as the adverts “feeding social media with dodgy financial promotions”, but financial fraud has rocketed, especially during the coronavirus pandemic, as more consumers shop online and try digital banking and investing.
Google has prohibited investment advertisements that are not FCA-authorised – including for gold and cryptocurrencies – since September 6 this year.
Steward said the FCA was pleased by the Google action.
“We can see it having an impact already in curtailing the increase in suspicious financial promotions on Google searches,” he said.
“We are talking to all social media firms about this and it’s important that all of them change their processes and procedures otherwise we will have to take action,” Steward added.
The tech firms have said they are investing in fraud prevention and collaborating with the government and regulators.
© Thomson Reuters 2021