Google warned by watchdog over risky financial adverts
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’