The UK's financial regulator has given a lukewarm response to Google's plans to tighten the promotion of scams on its platforms.
It has warned that Google's actions may not be enough to halt the introduction of tough new legislation to prevent fraud as part of the forthcoming Online Safety Bill.
To protect consumers from dodgy financial schemes, firms advertising financial services will now have to prove they are authorised by the UK's Financial Conduct Authority (FCA). In a recent related enforcement action, the watchdog banned crypto super-exchange Binance from "regulated activities" in the UK, although its dotcom site will not be affected. Binance was one of 64 cryptocurrency-related firms that withdrew their applications to register to do business in the UK, an FCA spokesperson told Reuters earlier this week.
The changes to the Google Ads Financial Products and Services policy, announced today, will come into force at the end of August, paving the way for tougher safeguards for those looking to advertise investments, savings, and other financial products through the internet giant.
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In a statement, Ronan Harris, vice president and MD at Google UK & Ireland, said: "Today's announcement reflects significant progress in delivering a safer experience for users, publishers and advertisers.
"While we understand that this policy update will impact a range of advertisers in the financial services space, our utmost priority is to keep users safe on our platforms – particularly in an area so disproportionately targeted by fraudsters."
While Google has a global presence, today's announcement "will apply to UK advertisers only."
The FCA, meanwhile, has said it welcomes "all steps which protect consumers from scams" and recognises that this is a "positive move from Google."
However, before making a snap judgement it wants to "review the detail" and the regulator didn't rule out plans to impose stricter legislation to stamp out online financial fraud.
"While this is an important step from Google we think a permanent and consistent solution requires legislation," a spokesperson for the FCA said.
"We also continue to consider that investment fraud caused by online advertising should be included in the scope of the Online Safety Bill, and welcome the Treasury Committee's recent statement on this."
Cash or credit?
Earlier this month, Mark Steward, director of enforcement and market insight at the Financial Conduct Authority (FCA), was quizzed by MPs about scam ads.
Is it appropriate for a regulator to have to post warnings while Google profits from social media companies that make money out of fraud...
After being asked whether it was "appropriate for a regulator to have to post warnings while Google profits from social media companies that make money out of fraud," Steward agreed that "the irony of us having to pay social media to publish warnings about advertising that they're receiving money from is not lost on us."
He told MPs that as part of ongoing discussions, Google had offered the FCA a £600,000 refund on ads it had spent with Google warning people about the dangers of online financial scams.
The FCA has yet to confirm whether it will accept the refund or whether it was offered in cash or as credits.
In a statement today, Google has again pointed out that it has "pledged $5m in advertising credits to support public awareness campaigns" which will be offered to "cross-industry organisations already campaigning on this issue, as well as government bodies undertaking awareness campaigns." ®