Financial Conduct Authority  

FCA spends £300k to fight online fraud

FCA spends £300k to fight online fraud

The financial regulator has spent more than £300,000 in the first half this year fighting fraudulent and misleading adverts online. 

The Financial Conduct Authority's high-return investment campaign saw it use paid search adverts to "directly attack" online promotions for illegal or unsuitable financial products. But the campaign ended in June after six months. 

FTAdviser understands the campaign was planned to be a short-term intervention from the regulator to inform a wider campaign on investment harm, which is currently in development.

It is expected this new campaign will look to combat any harm to consumers which come as a result of the ongoing coronavirus pandemic.

It comes at a time when experts and the City-watchdog itself has warned scams are likely to increase amid the uncertainty and vulnerability of the coronavirus pandemic. 

According to a Freedom of Information request submitted by FTAdviser the FCA spent £326,334 on paid search adverts between January and June this year, an average of £54,389 each month.

In an evidence session before the Treasury committee in March former chief executive Andrew Bailey said the regulator was "playing whack-a-mole" with adverts for high risk and potentially fraudulent investments online. 

In an attempt to protect consumers Mr Bailey said the FCA was "annoyingly" now paying for its own posts to appear on Google .

The FCA has previously told FTAdviser it used paid searches against common investment keywords to target consumers at a "critical point" in their online investment journey. 

Earlier this year the regulator warned of "sophisticated and opportunistic" scammers looking to capitalise on the confusion surrounding the coronavirus outbreak. 

In July the Personal Finance Society warned the pandemic was leading to new types of fraudulent activity.

Jemma Jackson, head of PR at Interactive Investor, said crime prevention was an important part of the FCA’s remit, with an "enormous" scope. 

Ms Jackson said: "Tacking financial crime has always been crucial, and whilst it is often more vulnerable groups most at risk, anyone can fall victim.

"Fraudsters are increasingly sophisticated and the whole industry needs to work together – there is no one solution, and this is reflected in the FCA’s multi-pronged approach."

She added: "Advertising campaigns, by definition, tend to run over a period of time and should not be viewed in isolation – the FCA ScamSmart campaign has been running for a number of years now and is ongoing.

Policy change needed

Last week (August 26), the FCA became more targeted in its scam awareness campaign and called in football commentator Clive Tyldesley after finding football fans are highly likely to be drawn in by fraudsters.

It revealed more than £30m has been lost to pension scams in the past three years alone and individual losses ranged from less than £1,000 to as much as £500,000, with the typical victim being a man in his 50s.

But the pension industry believes it is now time for the regulator to change its policy focus as there is a growing body of evidence that men tend to be more vulnerable to scammers’ tactics than women.