The report noted that the Coronavirus pandemic may be exacerbating existing perimeter issues and encouraging unlawful activities, especially impacting vulnerable consumers and SMEs.

In the report, the FCA expressed concern about the mass-marketing of high-risk investments to retail consumers and the increasing number of investors “drawn to them by misleading promotions”.

The regulator said search engines and social media platforms “play an increasingly significant role in communicating financial promotions” to consumers. It expressed concerns that consumers were being more readily exposed to adverts for scams and promotions of high-risk investments

It said: “We think that it is important that online platform operators, like Google, bear clear legal liability for the financial promotions they pass on – at least to the same extent as traditional publishers of financial promotions; that would mean that an online publisher would have to ensure that any financial promotion which they communicate has first been approved by an authorised person or otherwise falls within the scope of an exemption in the Financial Promotions Order.

“We are currently considering with the Treasury the application of the financial promotions regime to these platform operators and whether we need any new powers over them.”

In its report the regulator called for the inclusion of fraud within the Online Harms legislation, given the FCA’s limited power to take down advertising by those seeking to scam people via the internet. It said: “Without this change in the law, our efforts in this area will not achieve the results that many of our stakeholders expect.”

Many of the victims of the London Capital & Finance mini-bond scam were believed to have found the company through online searches. In its report, the FCA referenced this saying it “raised questions about how these types of product are marketed to retail investors.”

The report also included updates on issues discussed in last year’s report.

This includes the issuing of a temporary product intervention in January to ban the mass-marketing of speculative illiquid debt securities and preference shares to retail investors for 12 months. The FCA is currently consulting on proposals to make this ban permanent. Referring to this ban, the FCA expressed concerns around the mass-marketing online of these types of securities using promotions to entice investors with promises of high returns while downplaying risks and/or suggesting products are more secure or protected than is the case.

It also sets out other areas where progress has been made or where there is continued harm to consumers and market users around the perimeter, particularly in light of the Coronavirus (Covid-19) pandemic.

The report will form the basis of a formal discussion with the Economic Secretary to the Treasury later this year, to help improve transparency around the actions being taken on the perimeter.

The report follows FCA chairman Charles Randell lambasting scam investment advertising on Google and social media at the FCA’s Annual Meeting held online last week.

Mr Randell, in response to a question at the meeting, said it was wrong that scammers could post ads on Google and other search engines and social media and avoid the consequences. He said the FCA was looking at what steps the regulator could take to tackle the growing problem which was fuelling some of its workload when the watchdog had to pick up the pieces after consumers were ripped off.