The British financial regulator has accused the American technology giant Google of not doing enough to stop scammers by using their web pages to target the victims.
In response to questions at the Financial Conduct Authority's annual public meeting on Thursday, the regulator's enforcement chief, Mark Steward, said that the steps taken by Google to remove false investment ads were "missing" – and were "creating a production line that spreads fraud ".
Under current law, the FCA has no power to compel internet companies to refuse financial advertisements. It can only ask them to take down fake campaigns once they have been discovered. As a result, fraudsters and promoters of high-risk schemes have been able to place ads aimed at UK private investors on Google's search pages.
London Capital and Finance, the unregulated mini-bond issuer that collapsed in 201
More recently, the FCA has teamed up with Google to address such issues and is now sending the technology group a list of ads and websites they believe are scams.
However, Steward told the meeting that the system did not work. “Scammers can place blank ads very easily and very cheaply. . . but even after names appear on our alert list, Google cannot find the ads to remove them. "
This allows scammers to play a" percentage game "where the ads can be distributed to all Internet users and after just one answer" [they] is already in profit. "
Steward added that Google's own advertising process would hardly solve the problem. "The steps being taken will inevitably fall short," he said. "Confirming after an ad is live is problematic. We do not yet know what the verification process entails, and unless you knock on someone's door, it's not clear how it's going to work.
To demonstrate the problem, FCA leader Charles Randell later showed journalists the latest Google search results for "high-return investment", which included companies offering "50 percent profit in a week" and "15 percent income from" risk-free " bond investments. "This is all scam and what Google does, it does not work," he said.
Google said they had updated their policies to provide more information about advertisers' identities, business models, and relationships with third parties to ensure that users could be trusted. the ads they see.
"Protecting society from ad fraud and scams is a key priority for Google," the company said. "This policy update follows months of commitment and input from the FCA to ensure that we effectively address the poor players responsible for predatory financial advertising."
Hr. Randell said the FCA had asked the government to extend the proposed Online Harms legislation to include financial campaigns, but asked Google and other technology companies to act voluntarily. He noted that the social media platforms Twitter and Instagram – and "influencers" who post content on them – were also tainted by fraud.
Meanwhile, the regulator continues to pay for its own Google ads to warn consumers about online scams. In April, a request for freedom from the Financial Times publication FT Adviser revealed that this had cost around £ 45,000 a month. "Imagine how deeply frustrating I find it is that Google is monetizing these ads and also monetizing us," Randell said.
His comments came on the same day as the banking industry group UK Finance said that fraud was increasingly moving online. The latest report found that criminals had used Covid-19 to target victims over the internet and mobile channels.
Earlier in the meeting, consumer campaigns asked why the FCA took so long to complete an investigation into the failed Woodford Equity Income Fund, but rushed through changes to its own appeals system before reviewing three other scandals was published.  Gina Miller, the former anti-Brexit activist, said that refusing to postpone the appeal changes until the reviews were completed was "a kick in the teeth of the millions of investors who lost their life savings" in LCF, Connaught Income Fund and HBOS -read fraud. Independent reports on the FCA's handling of these cases will come later this autumn.
In response, the FCA said that the consultation on complaints had been extended by one month, and the Woodford investigation remained "a very high priority" which was being worked on. on "continuous".