Google warned by watch­dog over risky fi­nan­cial ad­verts

The Daily Telegraph - Business - - Business - By Adam Williams

THE City watch­dog has warned it may seek fresh pow­ers and in­ter­vene af­ter it crit­i­cised Google for not do­ing enough to pro­tect con­sumers from high-risk and un­reg­u­lated in­vest­ments.

Rogue firms are able to pro­mote and sell risky in­vest­ments to con­sumers search­ing for sav­ings ac­counts and safe pro­tected bonds by pay­ing Google to pro­mote their prod­ucts above le­git­i­mate firms. The Fi­nan­cial Con­duct Author­ity and Google have held talks to dis­cuss the prob­lem but the search en­gine’s pro­mo­tions fall out­side the reg­u­la­tor’s re­mit.

The FCA is pow­er­less to force ac­tion with­out a change in the law.

At the reg­u­la­tor’s an­nual pub­lic meet­ing, the watch­dog’s chair­man Charles Ran­dell said the lack of progress was “deeply frus­trat­ing” and sug­gested leg­is­la­tion would be needed.

The FCA has spent hun­dreds of thou­sands of pounds to pro­mote its con­sumer ad­vice in Google’s search re­sults.

This has led to the per­verse sit­u­a­tion where the search en­gine is prof­it­ing from both the rogue ad­verts and the reg­u­la­tor’s at­tempts to stop them.

Mr Ran­dell was crit­i­cal of the fact Google was earn­ing money from rogue firms but also “from us as we have to try and post our own ad­ver­tise­ments”.

He said that ur­gent change was needed and sug­gested the reg­u­la­tor would pur­sue leg­is­la­tion changes.

Jonathan David­son, the reg­u­la­tor’s di­rec­tor of su­per­vi­sion, sug­gested that all fi­nan­cial firms seek­ing to ad­ver­tise with Google should be screened against the FCA’s reg­is­ter of ap­proved firms.

At present many rogue ad­verts are only re­moved fol­low­ing com­plaints.

A Google spokesman said that it had up­dated its poli­cies to bet­ter pre­vent preda­tory ad­verts and that it was now seek­ing greater in­for­ma­tion about ad­ver­tis­ers’ iden­ti­ties, busi­ness mod­els and re­la­tion­ships with third par­ties.

“Pro­tect­ing the com­mu­nity from ad scams and fraud is a key pri­or­ity for Google,” the com­pany said.

‘Pro­tect­ing the com­mu­nity from any ad­ver­tis­ing scams and fraud is a key pri­or­ity for Google’

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