Three social media giants have agreed to change the way they manage adverts in order to clamp down on online scams.
Twitter, Meta (previously Facebook), and Microsoft have all committed to introducing a revised advertising onboarding process, which will require UK regulated financial services advertisers to be authorised by the Financial Conduct Authority.
In practice, this will mean that any advertiser regulated by the FCA will need to be pre-authorised by the regulator before promoting any financial products targeting UK users.
There is no timeline for the changes.
Mel Stride MP, chairman of the Treasury committee, welcomed the move.
“For too long these companies have turned a blind eye to the criminality at play behind these scams.
“As a committee, we have called for the government include fraudulent adverts in the online safety bill.
“Legislating against these pernicious scams is the only way to stop ever increasing numbers of people from falling victim to economic crime.”
The news comes after the FCA said in October that social media firms should be forced to stop financial adverts by implementing “systems and controls”.
At the joint committee hearing on the draft Online Safety Bill on October 18, the regulator was quizzed on its views about the government refusing to include paid for adverts in the upcoming Online Safety bill.
The government’s proposed legislation about online harms covers some financial harms but paid-for advertising, one of the main sources of online investment scams, is still not covered.
A call to include paid-for advertising was also included in a cross-party joint committee’s report on the draft Online Safety bill, published earlier this week.