Following a surge in online scams, Facebook, Microsoft and Twitter are to follow the example of Google and ban any advertisements for financial companies that are not registered with the City regulator
Fraud carried out by fake investment firms advertising on search engines or social media has skyrocketed during the pandemic, with losses almost doubling from £55.2 million in the first half of 2020 to £107.7 million in the same period this year.
UK Finance, the banking industry body, described the level of fraud as a “national security threat”.
Online platforms have been heavily criticised in the past for taking payments for adverts from fraudulent companies without doing appropriate checks, and this week a committee of MPs demanded that the government make them legally liable in its Online Safety Bill, which is set to be put before parliament next year.
A day after that announcement by the MPs, Facebook, Microsoft and Twitter said they would follow Google’s move, made in August, to refuse to allow any adverts on their platforms from companies not registered with the Financial Conduct Authority (FCA).
Despite initial concerns that scammers would find a way around the measures by cloning existing companies on the FCA’s register, The Times revealed last month that the number of people falling victim to fraudulent websites on Google appeared to have collapsed since its move — with scammers now preying on their victims via platforms run by Meta, which owns Facebook, Instagram and WhatsApp.
“It’s reassuring to hear that the online giants are finally taking a positive step in the right direction and stopping fraudulent advertisements from appearing on their sites,” Mel Stride, chairman of the Commons Treasury select committee, said.
“For too long, these companies have turned a blind eye to the criminality at play behind these scams.”
The technology giants made their announcement jointly through the Online Fraud Steering Group, a little-known body of which they are all members. They said they would “introduce a revised advertising onboarding process that requires … financial services advertisers to be authorised by the FCA”.
The announcement did not specify when the move would come into effect, adding: “Each company will operate their own processes and have differing timelines for when the policies will come into place.”