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FCA Aim To Prevent Financial Scams Online

FCA Aim To Prevent Financial Scams Online

The Financial Conduct Authority (FCA)  has made is clear in 2020 that plans where underway to increase marketing to prevent scams for high-risk investments. In 2020 alone, the regulator opened 1,542 supervisory cases involving scams or higher-risk investments.

Investment in technology, to maintain on the same level of fraudsters and scammers will only keep the FCA at an advantage to prevent the future of high risk investment losses. The FCA want to further this awareness and maintain preventative measures by having other online platforms on board with policing the activity, to prevent marketing from those who pose risk and harm to individuals. This will put a stop to scams as early as possible and will be key to significantly reducing the levels of harm caused.

Google is one platform that the FCA has mentioned. They would want advertising on platforms such as Google to have a transparent view on the adverts they allow. They have a clear liability of what should and should not be allowed to be published, with scams being a reason why they should not.

What the FCA appears to want to do is make the online platforms responsible in some way for policing this — for example, if a financial promotion appeared on Google, the platform would have a duty to make sure it had been approved by an authorised person or met the requirements of one of the exemptions. This would be a significant extension to its existing duties. Would the likes of Google take that lying down?

It would be a brave move by the FCA, but a necessary step change in the way it sought to prevent harm, and something that could make a real difference if successful.

It seems likely that a high proportion of those investing in higher-risk investments or who fall victim to scams first become aware of them online. If new legislation can assist the government and regulator in slowing down the flow of either illegal (scams) or inappropriate (higher-risk investments) information, this will feed in to a ‘prevention’ strategy.

The FCA also identifies that, while many of the investments are not scams, they are promoted using ‘high net worth’ or ‘sophisticated/experienced’ investor exemptions that bypass certain requirements, and in many cases would not be permitted at all for ‘standard’ retail investors.


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