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Social media sites such as Facebook and Instagram serve as a “gateway” to fraudsters, the city watchdog warned, as he called on them to take tougher action on financial scams.
While the Financial Conduct Authority praised Google for changing its terms for financial advertisements this month, the regulator’s chief enforcement officer said other tech companies were lagging behind.
“Social media sites are actually a gateway through which scammers gain access to large numbers of people in the population through online searches,†Mark Steward said at the FCA’s annual public meeting on Tuesday.
“We inform them that we expect them to be involved in this process of protecting the community,” he said, adding that the FCA “would otherwise have to take action.”
The FCA has waged a long-standing battle with social media companies and search engines amid an increase in online fraud, which the Home Office says accounts for around 86% of all fraud UK. The trend has been attributed in part to the Covid crisis, which has led to an increase in criminal activity online.
In total, scammers stole around £ 4million a day from UK consumers in the first half of the year, according to banking lobby group UK Finance, which warned last week that the level of fraud constituted a threat to national security.
A coalition of banking and tech companies has launched an emergency hotline – accessible by dialing 159 – for people to report and verify financial scams. The hotline will connect callers directly to their bank’s fraud prevention department.
Google was praised by the regulator on Tuesday for changing the terms of service for online advertisers, ensuring that none of its priority search results include financial promotions unless they are posted by advertisers. companies authorized by the FCA.
It follows long negotiations with the search engine. FCA chief executive Nikhil Rathi revealed this month that he has held more meetings with Google than any other company since joining the regulator last year.
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Search engines and social media sites were previously exempt from filtering financial ads because EU rules did not extend to online platforms. Although the FCA does not directly regulate social media sites, it has tried to use its post-Brexit powers to demand additional controls.
Google’s changes were already having an impact on online fraud rates, Rathi said. “We expect others to take the problem as seriously,†he said. “We expect Facebook, Twitter, Instagram and others to [do so] too, and we’re going to engage with them.
A Twitter spokesperson said: “It is against our rules to use Twitter scam tactics to obtain money or private financial information,” adding that the platform has taken “action energetic against anyone breaking their rules. “
A spokesperson for Facebook, which also owns Instagram, said the company “is devoting significant resources” to fighting scams.
“While no app is perfect, we continue to invest in new technologies and methods to protect people on Facebook and Instagram from these scams,†the spokesperson said.
The Guardian has also contacted Google for comment.
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