Lawmakers are asking tech giants including Google and Facebook to come clean on how much they are being paid to promote investment scams hosted on their platforms.
Treasury committee chair Mel Stride said that in the wake of a “huge rise in online crime,” his group of MPs wanted to “gain a clearer understanding of what is needed to ensure tech platforms are safe spaces for people to operate and not fall victim to scams or fraud.”
Social media giants have been in the firing line during a host of recent scandals where investors were convinced to put money into high-risk or fraudulent schemes that were advertised through their platforms, leaving savers out of pocket, but generating significant income for the service providers.
The likes of mini-bond firm London Capital and Finance spent £20m advertising through Google, claiming returns of up to 8% and a “100% track record”, before collapsing in January 2019, leaving investors nursing losses of more than £200m.
In a letter to executives at Amazon, eBay, Facebook, and Google, Stride asks each platform how much income they have made from hosting adverts for unregulated firms. He also asked how much they would be set to lose if they introduced a policy, as Google did on 6 September, to block adverts from firms that were not regulated by the Financial Conduct Authority.
FCA chair Charles Randell has previously called for an end to the “absurd” situation where Google makes money both from hosting the fraudulent adverts and then makes more money from carrying the regulator’s anti-scam messaging.
“How much has the FCA paid you in each of the last three years to warn users of your online channels about unauthorized advertisements and user-generated content?” Stride asks the platform bosses. “What arrangements you have entered into to compensate the FCA for the costs of that advertising?”.
Stride’s team is also asking for details on efforts to stop tax avoidance schemes from being promoted online. He has additionally asked the tech firms to tell lawmakers how often they have met with government representatives to tackle financial crime more broadly.
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