Finance watchdog slams Google for not removing scam adverts
The UK’s financial regulator has accused Google of failing to address the use of its search engine by fraudsters placing scam adverts.
The Financial Conduct Authority (FCA) yesterday said steps taken by Google to crack down on fake investment adverts “fall short” of requirements, and contribute to “a production line that proliferates scams”.
Speaking at the regulator’s annual general meeting, FCA chairman Charles Randell said the issue required “urgent change”.
Under current legislation, the FCA can only command search engines and social media sites to remove adverts if they have proven to be fraudulent, meaning scammers are able to place adverts aimed at duping investors on Google.
“The steps being taken are inevitably going to fall short,” said FCA chief executive Mark Steward.
“Conducting verification after an advert is live is problematic. We don’t yet know what the verification process entails and unless you’re not knocking on someone’s door, it’s not clear how it’s going to work. Google needs to put in intervention much earlier.”
Many victims of the unregulated mini bond issuer London Capital and Finance are believed to have first come across the company on Google and other similar search engines, the FCA said.
London Capital and Finance, which fell into administration in 2019 after taking £236m from small savers , spent more than £20m on Google adverts prior to its collapse.
The FCA said attempts to engage with Google to tackle fraudulent adverts on its search engine have failed to solve the issue.
“Scammers are able to place glossy ads very easily and very cheaply… but even after names appear on our warning list, Google can’t find the ads to take them down,” said Steward.
Google said it has updated its policies to improve transparency with customers, including gathering more information about advertisers’ identities and relationships with third parties.
“Protecting the community from ad scams and fraud is a key priority for Google,’ the tech giant said in a statement. “This policy update follows months of engagement with and input from the FCA to ensure we’re effectively addressing the bad actors responsible for predatory financial ads.”