Regulation  

FCA will go for 'high-profile scalps' over adverts

 

The Financial Conduct Authority will be looking for some high-profile scalps over failures relating to financial promotions, Alain Desmier has said.

The founder of Contact State, which has campaigned for an end to rogue lead generation and fraudulent online advertising, said: "I think we are going to see a lot more enforcement action over the next three months linked to these changes. 

"The FCA is going to look for some high-profile scalps. It is going to look for large buyers of data and it is going to say 'show me the proof you have to be able to market to this consumer'."

His comments came as Google's new rules come into force on August 30. As reported earlier this year by FTAdviser, under these rules, if an advertiser is going to generate adverts on Google for a financial product, Google will ask the firm for an FCA number or for proof of the directly authorised firm that is vouching for the adverts. 

There will also need to be more due diligence done by the buyers of leads, whether they are providers or advisers. 

"If you see a fraudulent advert then you can inform Google that it is misleading, and Google will say it will follow up with the directly authorised firm or the approving firm.

"There is going to be much more of a chain of liability."

Desmier warned: "Neither Google nor the FCA have talked about consequences but if I am going to complain about a directly authorised firm and an advert they are running, then I fully expect the FCA to follow up on that complaint.

"Every lead will have to be accounted for. People are going to be made examples of. That is what is going to happen. Show me where the control function is in place to make sure every advert is approved. This is what the FCA expects of you."

He added: "You have to be able to answer the question, 'Where has this lead come from?'. Right now, you need to be preparing. Both the FCA and Google will make an example of you. Time is up on regulated lead generation in the manner in which it has been operating the past 15 years."

Earlier warnings

The FCA did not respond to the comments made by Desmier but in June this year, it warned social media firms and search engine providers that it would take action against those that host scam adverts.

At the Treasury Committee evidence session on economic crime on June 14, the FCA's head of enforcement Mark Steward said the watchdog has made it very clear that it expects social media giants to be taking action to reduce the number of scams that are found on their sites.

However there are still going to be issues, and part of the problem, according to Desmier, has been that there are "no barriers to entry". "The regulations to sell a product should be matched by regulations to promote that product", he added.