Pimfa has called for the Financial Conduct Authority to be given the power to direct Ofcom to act over potentially fraudulent online adverts.
In an evidence session to MPs around the online safety bill last week (May 26), Pimfa director of government relations and policy Tim Fassam said the FCA should have the authority to act over fraudulent user generated content that appears on search engines and social media platforms.
The bill, which is effectively a framework aiming to protect internet users from scams and hold tech giants to account, came one step closer to becoming law after being introduced to parliament in March, nearly a year after the first draft was published.
However, Fassam called for an amendment to the bill that would see partner regulators such as the FCA provide strategic support to Ofcom to prevent harm being introduced to financial services consumers.
While the online safety bill deals specifically with fraud and breaches of the financial services and markets act, Fassam said it was unclear how Ofcom will ensure it has “the expertise needed to identify breaches”.
Referencing London Capital & Finance, Fassam said in this case, the regulated firm was able to introduce harm into the market through the sale of unregulated, speculative mini bonds aided specifically by advertising, offering significant returns in a low interest rate economy.
He argued that if the FCA were able to swiftly prevent adverts of this nature through Ofcom it could significantly…
