PIMFA continues to urge for FCA to have a role in combatting fraud
PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, has repeated its call for the Financial Conduct Authority (FCA) to have a greater role in combatting fraud in response to a call for evidence from the Home Affairs Committee.
In May 2022 PIMFA, giving evidence to the parliamentary committee scrutinising the Online Safety Bill, urged that the FCA should have the authority to act over fraudulent user-generated content that appears on social media and search engine platforms.
The establishment, through the Online Safety Bill, of a ‘Duty of Care’ on social media websites and search engines in the UK is a hugely important principle and a victory for all those, including PIMFA, who have campaigned over the years for this principle to be established in law. It will help prevent fraudulent content from appearing on websites and reduce scam adverts and fake celebrity endorsements. But the Bill means such communications will be regulated by Ofcom.
PIMFA believes the FCA should be allowed to provide strategic support to Ofcom to prevent harm being introduced to financial services consumers and prevent scam adverts swiftly. Such a partnership between the FCA and Ofcom would ensure that Ofcom has the expertise to identify breaches, making the Online Safety Bill more effective in preventing fraud.
PIMFA is also calling for the government to create a single body responsible for fraud across the country to ensure a more holistic and organised approach to tackling what is the UK’s most widely reported crime. This would help to resolve the overly complex approach to tackling fraud that currently exists with multiple agencies and government departments holding various responsibilities. While the recently announced ban on cold calling is welcome, PIMFA also called for much greater international cooperation in combatting fraud given its global nature.
Alexandra Roberts, head of regulatory policy and compliance at PIMFA, commented: “The current focus on fraud by policymakers is welcome, as is the government’s commitment to reducing fraud by 10% by 2025. But we are also concerned whether the additional resources provided will be enough to obtain the required improvement and meet the commitment to reduce fraud. For there to be a difference, we believe significantly more funding is needed.
“We have also repeatedly urged the government to provide more funding and resource to Ofcom so that it will be able to regulate social media platforms and search engines effectively under the new powers given it by the Online Safety Bill.
“In order to eradicate fraud PIMFA believes there must be a role for the Financial Conduct Authority in helping to identify instances of fraud that introduce obvious harm to financial services consumers, a more centralised approach to combatting fraud and much more international cooperation. We would urge policymakers to support such proposals and will continue to work with regulators and the government to see these reforms come into being.”