Big tech faces scam advert crackdown using post-Brexit powers | #socialmedia

.Financial promotions, such as advertising an investment product, can only be issued by FCA-approved firms under the Financial Services and Markets Act. 

However, while Britain was in the European Union, a loophole meant that these rules did not apply to many foreign tech companies. This changed when Brexit happened, giving the FCA new freedom to take action.

It comes amid a jump in recorded investment scams as fraudsters cashed in on confusion during lockdown.

The FCA issued 1,200 warnings over online scams in 2020 – double the figure for the previous year – and cases have continued to grow rapidly in 2021. Regulators believe that fraudsters have taken advantage of lax safeguards and home-bound Britons spending more time online during the pandemic.

Mr Steward said: “This is something that Google could have recognised at the gateway before allowing that ad to appear on searches. 

“But it didn’t have any mechanism for identifying what is a financial promotion that requires this.”

He added the social media giants had been made aware of the changes in the law since Brexit because it was not immediately clear they had understood the implications.

The FCA spent almost £600,000 on Google ads last year warning users of online scams, causing outcry that the search engine also profits from the fraudsters which regulators were targeting. Mr Steward confirmed that the FCA has held discussions with Google about getting back money spent on the ads.

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