Financial Services Compensation Scheme  

Govt must do more to stamp out scams

Govt must do more to stamp out scams
 Pic: Andrea Piacquadio via Pexels

In the week more Covid-19 vaccine breakthroughs were announced, voices in financial services called on the government, regulators, advisers and providers to do more to help stamp out fraudulent financial advertising.

This was the message from consumer watchdog Which?, after a study carried out by the people's champion found almost one in 10 Britons have fallen victim to online scam ads hosted on social media and on search engines.

As a result, Which? is now calling on the government to give big tech greater responsibility for the so-called 'purchase scam adverts' hosted on their platforms.

This follows comments earlier this year from the Financial Conduct Authority, which criticised big-name tech giants such as Google for failing to do more to protect consumers against misleading or fraudulent adverts. 

Ray Walsh, digital privacy expert at ProPrivacy, commented: “It is no surprise to hear that one in 10 people have fallen victim to scam adverts from social media sites; the problem is almost epidemic.

"It is essential for social media platforms to find ways to flag and take down adverts that are clearly fraudulent, quickly and efficiently.

“Which? is absolutely correct that the government should seek to put legal pressure on social media sites to ensure they do more to prevent scam content and adverts from affecting consumers.”

Throughout 2020, the insurance industry has been warning about dubious lead-generation adverts appearing on social media and persistent cold-calling from lead generation companies.

In April, FTAdviser raised the alarm after reports from Rocketer revealed a rise in misleading insurance advertising appearing on Facebook, and seemingly using the Covid-19 lockdown to target consumers.

Last week, Financial Adviser revealed how insurance lead-generators have been cold-calling, using lists obtained pre-GDPR with the author's maiden name (which has not been in use since 2013) still recorded against her personal mobile number. 

Cura Financial Services, Protection Review and AIG, among others, have been urging advisers to flag suspicious activity with social media platforms, as well as with the various regulators and, by so doing, depriving the dodgy dealers of oxygen.

Earlier this year, Protection Review teamed up with Contact State to urge for a verification process for leads generated from social media and phone contact, to give consumers and brokers the assurance that the client’s data is being used legitimately.

The need for better security around consumers has never been greater.

With research from workplace savings specialist Cushon finding that 42 per cent of people do not think they are saving enough money each month to become financially secure, and charity Turn2Us finding that 33 per cent of Britons have fallen into debt as a result of the pandemic, it is clear more needs to be done.

This is why, as reported earlier this week, the Serious Fraud Office and the Financial Services Compensation Scheme’s pledge to work together to stamp out scams is most welcome. 

Those with the least amount of savings have the most to lose – and are most likely to fall prey to fraudulent or misleading advertising.