FCA cuts investment fraud losses with internet crackdown
The FCA says a crackdown on illegal investment advertising on the internet helped cut investment fraud in 2023, with overall losses down 40%.
The FCA said by working closer with internet firms it had turned the tide, with Google’s change of policy on investment promotion alone leading to a "100% reduction in illegal paid-for ads.”
Investment fraud losses connected to internet ads fell by 40% in 2023, the FCA said.
The number of investment fraud victims rose during 2023 by a relatively modest 4.3%, well below the 28% rise seen in 2022.
Investment scams originating online have rocketed in recent years.
In 2023 the FCA worked with internet firms such as Google, Bing (Microsoft), Meta, X/Twitter and TikTok to encourage them to change their policies to only permit ‘paid for ads’ for financial services, including investments, that have been approved by an authorised person.
The watchdog said that in 2023 the rate of growth of investment fraud “slowed significantly.”
In 2022, the number of investment fraud victims grew by 28% and the amount of losses by 53%.
The better news on investment scams came as the latest FCA figures show that the FCA issued 21% more scam warnings in 2023.
The FCA issued 2,286 warnings about possible financial scams in 2023, a rise of 21% from 1,882 in 2022.
In an update to its Reducing and Preventing Financial Crime strategy issued this week the regulator said that despite the rise in scam warnings last year there was a welcome fall in the rapid growth of investment fraud.
The FCA said the downwards trend in investment fraud was also reflected in the latest Crime Survey for England and Wales figures and the Home Office had highlighted the FCA’s work with regulated firms and online platforms as key drivers of the decrease.
This year the FCA plans to focus on tackling a number of key areas of financial crime: fraud, money laundering, sanctions evasion and terrorist financing.
The FCA also plans to step up its focus on tackling a number of emerging threats including AI misuse. The FCA said criminals were already using technologies such as AI.
The FCA also plans to increase its use of data and technology to tackle emerging issues and will also aim to boost consumer awareness of the risks of financial crime by using close monitoring of metrics to be alert to problems.
Financial Planning Today Analysis: Investment scams, particularly online, have soared in recent years with a number of well-publicised scandals. Many of these originated with investors being lured to invest after spotting internet ads promising high returns and guaranteed paybacks. Gullible investors were persuaded to invest millions by unscrupulous firms offering ‘too good to be true’ deals. Many were older and more vulnerable investors conned by slick internet ads and professional-looking websites. While it is too early to pop the Champagne, the FCA has seen a welcome reduction in illicit internet ads in 2023 and a significant drop in consumer losses. Its policy of working closely with the search engines and social media firms is beginning to pay off. There are still many bad ads out there but many now originate overseas, and firms like Google and others know they have an important role to play. There is more to do but the FCA has made good progress on investment fraud and many investors will have been saved from losing their hard-earned savings.
From Financial Planning Jobs. For more click on any job.
-
Financial Planner - home based/UK wide - £60k+
Financial Planning Jobs Read more... -
Financial Adviser - London/South East - To £70k
Financial Planning Jobs Read more... -
Senior Financial Adviser - £65k-£75k - Bucks
Financial Planning Jobs Read more...
This is a selection of jobs from our new Financial Planning Jobs site - for more job vacancies click on any job or the link below.
Financial Planning Jobs https://jobs.financialplanningtoday.co.uk/