MPs to grill social media giants over ‘inaction’ on monetary fraud : CityAM
MPs tomorrow will look into the role of online giants like Facebook and Google in preventing financial fraud amid concerns that companies are allowing scammers to ramp up their platforms.
Westminster’s Treasury Select Committee will investigate senior figures from Amazon, Google, Facebook and eBay for its “Fighting White Collar” investigation, with one MP lamenting “the lack of real muscles in exposing financial fraud”.
About £ 2.3bn was lost by UK consumers to online fraud last year, much of that coming through social media, according to Which?
Researchers found that consumers lost around £ 535 million to online investment fraud alone.
The government’s Online Security Act proposed new laws targeting social media users who commit scams from their profiles.
However, the Treasury Department’s Special Committee has called for the bill to go further and address financial fraud through paid advertising.
UK Finance, a financial services trade association, has also called for platforms to be responsible for proactively removing scams to keep their users safe.
Siobhain McDonagh, member of the Treasury Select Committee and Labor MP, pointed out that the giants of Silicon Valley are making money from these fraud operations.
“We know financial fraud is a huge area of growth and we know it is inadequately monitored,” she said.
“Social media companies make a lot of money with fraudulent offers and don’t seem to have any consequences for them.
“The lack of real strength to expose financial fraud and fraud threatens our reputation as a country.”
The Financial Conduct Authority (FCA) previously called for stricter regulation of social media websites regarding online fraud.
Labor MP Rushanara Ali announced earlier this year that the regulator is paying Google £ 600,000 a year to issue fraud warnings.
Mark Steward, FCA’s executive director of enforcement and market oversight, said at the time that “the irony that we have to pay social media to issue warnings about advertisements that make money has not escaped us.”
Amanda Storey, UK director of trust and security for Google, wrote in City AM today that “a problem of this magnitude requires cross-industry collaboration” and that companies should only accept advertising funds from FCA accredited users.
Storey will testify at the Treasury Select Committee hearing tomorrow.
“Google was the first technology company to join Stop Scams UK to develop best practices,” she said.
“In addition to longstanding and solid guidelines for financial products and services, working with regulators has been an important tool to properly shape our response to increasing crime.
“Thanks to the policy updates that were introduced in consultation with the Financial Conduct Authority (FCA), we know more about the companies operating on our platform and relationships with third parties.”