The FCA has ramped up pressure on Google to crack down on adverts that promote investment scams.
Speaking at the regulator’s annual public meeting, FCA enforcement director Mark Steward said that steps taken by the internet giant so far ‘fall short’ of what is needed, the Financial Times reports.
He said Google was ‘creating a production line that proliferates scams’ by not stopping companies promising unrealistic returns from advertising on the search engine.
‘Scammers can place glossy ads very easily and very cheaply]…]but even after names appear on our warning list, Google can’t find the ads to take them down,’ Steward said.
Google AdWords allows advertisers to bid for certain key words to appear in search results. For example, a company could bid for the search term ‘best property investment’ to promote their scheme.
Often this means high-risk investments are marketed to retail investors despite being unsuitable for the large majority. It also means scammers can advertise with very few checks, despite the introduction of a verification system.
‘Conducting verification after an advert is live is problematic,’ Steward said. ‘We don’t yet know what the verification process entails and unless you’re not knocking on someone’s door. It’s not clear how it’s going to work. Google needs to intervene much earlier.’
The FCA does not have any power to tell Google to take down adverts as it is not a regulated company, although it can warn where it suspects a scam is being promoted.
FCA chairman Charles Randell said the regulator has asked the government to consider extending the Online Harms Act to include financial promotions. He also called on Google and social media platforms to voluntary take action on such adverts.
‘Whatever Google is doing, it’s not working,’ Randell added.
Google told the Financial Times it has updated its policies to find out more about advertisers before they place adverts on the platform.
‘Protecting the community from ad scams and fraud is a key priority for Google,’ it said. ‘This policy update follows months of engagement with and input from the FCA to ensure we’re effectively addressing the bad actors responsible for predatory financial ads.’