City watchdog orders High Street banks to tighten their controls in the fight against online scams
The City watchdog has told High Street banks to tighten their controls in the fight against online scams.
The Financial Conduct Authority (FCA) is locked in a battle with fraudsters to stop them scamming millions of Britons every year.
It is wrangling with social media giants such as Google to get fraudulent adverts removed from the internet and has suggested that banks should be doing more to protect customers.
The FCA is wrangling with social media giants such as Google to get fraudulent adverts removed from the internet and has suggested that banks should do more to protect customers
Mark Steward, the FCA’s executive director of enforcement and market oversight, said lenders must pay more attention to the ‘warning list’ of dodgy firms which it publishes on its website.
Speaking to MPs on the Treasury Committee, he said: ‘The warning list is the cornerstone of the strategy we have to protect consumers.
‘It was initially created specifically to help consumers but it’s now become such a key weapon we also think it should be used by banks as well.’
He said major banks should carefully keep tabs on the list to ensure that they are not offering services to any of the firms on it.
And they should also try to prevent savers from transferring money into fraudsters’ accounts, Steward added.
He said: ‘We think this is something the banks need to be vigilant about and improving their systems as well.’
The FCA spends around £600,000 a year on Google adverts to warn savers about scams, which tout everything from high-return bonds to shares in firms such as Tesla.
Some even copy the branding of companies such as Aviva or Hargreaves Lansdown, tricking people into sending money.
Yet Google is also raking in cash from the fraudsters, who pay for adverts to lure victims. In front of the Treasury Committee on Monday, Steward repeated his calls for the Government to include financial harm in the Online Safety Bill.
This would put a legal obligation on social media giants to check that there is a legitimate firm behind adverts they host.
MPs on the committee are calling for Google to reimburse the watchdog for the money it has spent on adverts warning of scams.
Rushanara Ali, the Labour MP for Bethnal Green and Bow, said: ‘They are basically profiting out of fraud and are costing the FCA money.’
A spokesman for banking industry body UK Finance said: ‘The industry invests billions in advanced technology to protect customers and in 2020, £1.6billion of unauthorised fraud was stopped.’