FCA spends £368k on scam warnings

FCA spends £368k on scam warnings

The Financial Conduct Authority has spent around £368,000 on scam warning messages in relation to investments, pensions and loan fee fraud.

In a letter to MP Mel Stride, dated January 19, FCA boss Nikhil Rathi outlined the regulator's expenditure as of November 2021.

The letter followed the oral evidence session the FCA had with the Treasury Committee on December 8 in which it was asked whether the word “investment” should be used in relation to cryptocurrencies, including within cryptocurrency advertisements.

The FCA’s costs for delivering scam warning messages over the past three years was as follows:

In 2019, the total across the three platforms was £403,531 and for 2020 this was £443,939. For 2021 it totalled 368,805. 

However, the figure does not include spending on other activities and campaigns which the regulator carried out through channels such as those run by Microsoft, Snapchat and TikTok. 

Rathi said: “In December 2021, Google offered the FCA $3m in advertising credits to be spent on its’ Google Ads and YouTube platforms, which we are considering how to use most effectively. 

“Our discussions with Google over recent months have also resulted in positive changes to Google’s policies for verifying potential advertisers.”

An example of this was the FCA’s InvestSmart campaign launched last year, aimed at warning investors about the dangers of investing in high risk, high return investments. This is set to run over five years at a cost of about £11m. 

“We are seeking to reach investors in spaces where they are consuming information and advice about investments, including TikTok and YouTube,” Rathi said. 

Data-related spending

The regulator was also questioned on its current data-related spending and future projections of spending, including a breakdown to show the main areas of spend. 

The FCA said for the financial year 2021 to 2022, its data and technology spend is around £72m across the organisation. 

This includes updating and maintaining its technology infrastructure to ensure it remains operationally resilient and implementing tooling to improve how the regulator collects, stores, and manages data. 

Rathi said: “This also supports our regulatory goals in relation to authorising and supervising firms. In addition, this funding enables the delivery of longer term transformational change, such as upgrading the register over a five year programme to improve user experience, ensure data quality and prevent harm (approximately £2m this year).”

Last year, the FCA moved over 52,000 firms, their 120,000 users and all historic submissions from a legacy system to its new RegData data collection platform

“We invested £30m in delivering the programme, which included engagement with the firm user population, migration and platform build and test,” he said. 

“We estimate we have made £1.5m in efficiency savings through developing new tools such as Single View dashboards, which provide greater visibility of risk across priority firms and sectors. This will be supplemented by improved search capabilities.”

In addition, the FCA spent £2.1m on implementing a business resource planning system called Workday.