Britain’s financial regulator has to make daily sweeps of the internet. This sweep is to warn about online scams in real time and keep pace with fraudsters who are often based outside the country. Mark Steward, the Financial Conduct Authority’s (FCA) director for enforcement, said that the warnings have become a cornerstone of the watchdog’s fight against a surge in financial scams after this pandemic sent more people online.
The FCA issued 1,200 consumer warnings last year. Those were scams advertised via social media platforms by fake companies which are not regulated by the watchdog, said Steward in parliament’s Treasury Select Committee. He said that they are now issuing warnings straight away and they are conducting sweeps several times a day of the internet, issuing warnings within 24 hours so that they are up to date.
The number of victims can be reduced by faster warnings. Steward said that banks should be checking who is on the list in case they are customers, meaning lenders could be unwittingly aiding fraud by taking payments on behalf of criminals. Online financial scams are not as widespread as traditional banking fraud. Because it was easy getting passwords from customers and so it was more prevailed. According to the UK’s Action Fraud, last year, victims of investment scams who referred to a social media platform lost 63 million pounds.
The FCA is also paying Google to publish the regulator’s warnings. Britain has proposed an “online harms” law. The FCA wants such checks to be made obligatory under the new law. Steward said that the irony of them having to pay social media to publish warnings about advertising they are receiving money from is not lost on them. Lawmaker Anthony Browne urged Steward not to be overawed by the deep pockets of social media firms. Google has said it has robust financial products and services policies, and has been adding more requirements on advertisers.
Steward said the ball was now in the court of social media firms. And so, they will come up with ways to tackle scams. He added that they shall see how successful they really are. The proof will be in the pudding. If not, then they are going to have to take action of a different kind.