Any trawl through the Internet or Social Media will uncover umpteen scams and ‘dodgy’ ads. From clickbait nonsense to financial advertising from other jurisdictions which has never come close to the FCA’s radar. It’s no wonder Mr Lewis has lost his patience. For its part Facebook says it will look into any complaints but it’s worth noting the record of social media and internet providers in tackling advertising abuse is not a good one.
The real issue is that the global nature of the Internet means crooks from all over the world can target vulnerable investors in the UK - and other affluent nations - and that needs to be tackled. Financial Planners are increasingly working in an online world and must be concerned that their clients are exposed to so many poor financial offerings and, frankly scams. The volume of these on the internet undoubtedly scares some investors into shunning the financial services world completely.
Advertising from UK providers is subject to tight laws and restrictions both for financial products and other areas such as alcohol and tobacco. Given the global reach of many Internet giants it simply isn’t acceptable for the giants to claim it is beyond them to stop predatory advertising, whether it be for financial products or anything else.
Mr Lewis is to be applauded but now needs to drive forward his campaign to force the Internet and social media firms to clean up their act. His own supporters and others will benefit as well as UK consumers more widely.
It remains disappointing that the police will often intervene against reported ‘hate’ speech or trolling online, particularly on social media, but are often slow to respond to financial scams which seem to be unfettered to a large degree. The FCA was forced to intervene in the binary options online scams only when cumulative losses for UK investors topped £60m. To be fair, binary options were not part of their remit until the rules were changed.
The recent progress by the FCA on tackling binary options scams, promoted mostly online and on social media, shows that where there is a will there is a way.
Ultimately it may require the British government and MPs to intervene to force change. They often underestimate their power in this area but there is little likelihood that Facebook and other similar operations would accept exclusion from the UK market as the price of running suspect ads.
If there is a positive aspect it is that Facebook and the other Internet giants have taken some steps along the road to improvement but the road must be a fast one, and not a B-road. There are signs that online scams are getting out of control and that’s not good for anyone. Urgency is needed.
Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with over 20 years of experience