The Financial Conduct Authority “can’t be responsible for everything”, a leading Treasury official conceded, as the government opens the door to tougher legal action over online investment scams.
Amid an explosion in fraudulent investments being promoted through social media platforms during the pandemic, City minister John Glen told lawmakers that while the FCA has “a significant role to play” in stopping hundreds of millions being funnelled to scammers, the government had to drive through a tougher legal framework to affect real change.
The FCA and the government have been at loggerheads for several months as the regulator campaigned to get digital advertising included in the Online Safety Bill currently working its way through parliament. Earlier this month, culture secretary Nadine Dorries blamed “legal advice” for why scam financial adverts could not be included in any updates to the Bill.
Taking questions from the Treasury Committee on 29 November, Glen said that the Treasury could end up pushing for online advertising to be included in the Bill if Dorries’ department’s work on the issue failed to bear fruit.
“This is a massive problem…We can’t miss it in the absence of a better option,” Glen said.
“It is a big area I think we want to look at very carefully before that legislation comes into force is advertising…I am very sympathetic to that in the absence of an effective online advertising programme.”
