Finance

FCA urges new rules to compel Google, Facebook to urgently tackle online fraud

The Financial Conduct Authority has called on the government to force digital platforms like Google and Facebook to prioritise investment fraud as Westminster plans a crackdown on online harm.

The regulator has said the legislation should make content relating to fraud offences ‘priority’ illegal content, requiring monitoring and preventative action by platforms.

“We see real risks to consumers from outside our remit from both online advertising and from those using exemptions to sell products to ordinary customers,” chief executive Nikhil Rathi said as the FCA published its Perimeter Report on 21 October. “Change is needed and we will continue to push for powers where we need them.”

The report, its annual review of where the FCA’s remit reaches and where consumers should expect protections, comes as the Online Safety Bill continues to work its way through parliament.

READ Facebook, Twitter, TikTok need to ‘do the right thing’, says FCA

The regulator has traditionally stayed out of political debates such as Brexit and the changing of governing parties but it has repeatedly taken steps to lobby the government to take firmer action on online investment fraud in recent months, expressing its frustration that the bill currently does not include online investment fraud within its scope.

“The next move is firmly in the Government’s hands, with the FCA highlighting where it thinks the regulation is failing and that it is powerless to fix it as its jurisdiction doesn’t extend to regulating these websites and posts,” Laura Suter, head of personal finance at AJ Bell said.

“The FCA has firmly pointed the finger at social media sites, such as Facebook, Twitter and Instagram, as needing to do more to stop the rise in fraud. It’s calling on the government to force these internet giants to do more to protect savers from online scams, including monitoring posts.”

While markets offering funeral plans and buy now, pay later services have been brought under the FCA’s regulation in the past year, the watchdog is also suggesting that legislators should extend its Senior Managers and Certification Regime to payment and e-money firms.

READ Lawmakers push Google, Facebook, eBay and Amazon to disclose fees they get to host investment scams

Since its creation in 2013, the FCA’s remit has already expanded significantly, taking on markets such as payday lending, claims management companies, and an objective to improve competition in markets.

To contact the author of this story with feedback or news, email Justin Cash

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