UK’s Financial Watchdog Goes Real-time to Catch Online Criminals
The FCA is sweeping the internet on a day-to-day basis to pull out cybercriminals, as the number of warnings sent out continues to increase.
Britain’s financial regulator is forced to weed out scammers of the internet in real-time on a daily basis due to ever-increasing online fraud. An official of the FCA (Financial Conduct Authority) stated that fraudsters are often based outside the country, making this step necessary.
The FCA’s director for enforcement, Mark Steward, stated that the warning has become the basis of the fight against increasing financial scams, particularly since the onset of the pandemic as the lockdown shifted more people online.
In the previous year, the FCA issued 1200 warnings related to social media scams made by fake companies as such companies are unregulated by Britain’s watchdog. The number of warnings made was twice the size of the warnings made in 2019, Steward told parliament’s Treasury Select Committee
He further announced:
“We are now issuing warnings straight away, we are conducting sweeps several times a day of the internet and issuing warnings within 24 hours, so they are up-to-date,”
With rapid warnings, not only can the number of victims be reduced, but banks can also take notice of which individual is present on the warning list to stay cautious, stated Steward. This means that lenders can verify customer identities that may be involved in fraudulent activities prior to taking payments on behalf of such criminals.
He also commented that while online financial scams are not as widespread as traditional banking fraud, they are nonetheless on the rise and being used by criminals to steal sensitive customer data.
According to UK’s Action Fraud, victims of investment scams lost as much as 83 million pounds (USD 89 million) last year. This amount makes almost a 10th of the total 784 million lost to financial scams in the previous year.
Google is also being paid by the FCA to publish the warning online. Steward stated that Google had offered it a “credit” on future warnings.
“The irony of us having to pay social media to publish warnings about advertising they are receiving money from is not lost on us,” Steward said.
Britain has proposed an “online harms” law, but it does not require social media companies to check on the validity of firms advertising financial products.
However, the FCA wishes to make such checks obligatory under the law.
Lawmaker Anthony Browne insisted not to be overawed by the deep pockets of social media companies, claiming that Google itself might be guilty of fraud through advertising scams.
Steward also asserted that the ball is in the court of social media companies, making it their responsibility now to tackle increasing online financial scams.