Speaking at the Cambridge International Symposium on Economic Crime today (September 6), FCA chairman Charles Randell outlined the need for a permanent and consistent solution to the problem of online fraud from paid-for advertising.
He said: “People used to think of the internet as a free space, outside the law, impossible to regulate. And while there’s no doubt that it has enabled businesses to innovate and grow in ways that serve us well, their awesome power must be matched with responsibility.
“As we live more and more of our lives online, we can’t allow online businesses to operate in ways we wouldn’t tolerate with any other business. The tide of regulation is turning all over the world, and online platforms should expect a future where regulation addresses the significant risks they pose in the same way as other businesses. Same risk, same regulation.
“That includes rules which protect people from investment fraud and scams.”
When he last spoke at the Symposium in 2019, he urged search and social media giants to step up and stop publishing and profiting from fraudulent content.
“Since then, we have seen some progress,” he said. “Google has committed to stop promoting advertisements for financial products unless an FCA authorised firm has cleared them. Google is doing the right thing and we will monitor the impact of its changes closely.
“We now need other online platforms – Facebook, Microsoft, Twitter, TikTok - to do the right thing too. And we think that a permanent and consistent solution requires legislation.”
His speech comes last month, FCA chief executive officer Nikhil Rathi, reiterated in a podcast that the regulator was keen for ads to be included in the Online Safety bill, which is currently going through parliament, in line with calls from the industry.
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.
Randell emphasised the FCA considers it should be.
He said: “Even with better targeted laws, the internet will continue to be a very challenging space for regulators. Hercules rerouted two rivers to wash the stables out, and we’ll need two streams to tackle the problem of online financial scams: appropriate regulation, including self-regulation by online platforms and robust enforcement by the authorities; and greater consumer awareness about online scams.