MPs to grill social media giants over ‘inaction’ against financial fraud: CityAM

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MEPs will investigate tomorrow the role of online giants like Facebook and Google in preventing financial fraud amid fears that companies will let crooks run rampant on their platforms.

Westminster Treasury Select Committee to toast personalities from Amazon, Google, Facebook and eBay for its investigation into “the fight against economic crime”, one MP lamenting “the lack of real force put in the detection of financial fraud” .

Around £ 2.3bn was lost by UK consumers last year to online scams, much of it via social media, according to Which ?.

Researchers found that consumers lost around £ 535million through online investment scams alone.

New laws have been proposed in the government’s online safety bill, which would crack down on social media users who defraud their profiles.

However, the Treasury Select Committee has called for the proposed legislation to go further and take into account financial fraud that takes place through paid advertising.

UK Finance, a financial services trade association, has also called for platforms to be responsible for proactively removing scams to protect its users.

Treasury Select Committee member and Labor MP Siobhain McDonagh pointed out that the Silicon Valley giants were making money from these fraudulent operations.

“We know that financial fraud is an area of ​​huge growth and we know that it is insufficiently supervised,” she said.

“Social media companies make a lot of money by offering fraudulent offers and seem to have no consequences in doing so.

“The lack of real strength put into detecting financial fraud and scams threatens our reputation as a country. ”

The Financial Conduct Authority (FCA) has previously called for stricter regulation of social media websites when it comes to online fraud.

It was revealed by Labor MP Rushanara Ali earlier this year that the regulator is paying Google £ 600,000 a year to issue scam warnings.

Mark Steward, executive director of enforcement and market oversight for FCA, said at the time that “the irony of having to pay social media to post warnings about advertising they get money from is not lost on us “.

Amanda Storey, UK director of trust and security at Google, wrote in City AM today that “a problem of this magnitude requires cross-industry collaboration” and companies should only take advertising money from FCA-accredited users.

Storey will be testifying at the Treasury Select Committee hearing tomorrow.

“Google was the first tech company to join the industry body Stop Scams UK to develop best practices,” she said.

“In addition to strong and long-standing policies for financial products and services, working with regulators has been a critical tool in properly responding to the rise in crime.

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“Through policy updates introduced in consultation with the Financial Conduct Authority (FCA), we learn more about the companies and relationships with third parties operating on our platform.”




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