£11m ‘fraud blitz’ to protect public from investment scams, which have soared during Covid
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It will launch an £11million campaign to warn consumers about the dangers of deception as it takes a more hands-on approach to restrict the marketing of high-risk investments.
The City watchdog wants to slash the amount of money that consumers lose to what it says are investment cons perpetrated or facilitated by regulated companies, as well as halve the number of people that put their money into risky, unsuitable products.
Financial fraud has soared online due to the pandemic.
The FCA said that it will take a more “assertive and agile” approach to detecting and dealing with criminal behaviour.
To that end, the regulator said it will pay closer attention to what firms do online and use automated systems to comb the web to identify rip-off artists and raise the alarm.
It will also improve how it detects, assesses, prioritises and takes action against fraudsters.
Firms should expect a tightening of regulatory standards and greater scrutiny
Simon Turner, EY partner
And the FCA will also use the information and intelligence it has gathered when individuals and firms apply to be licenced to help it detect potential crooks.
Sarah Pritchard, executive director of markets at the FCA, said: “We want to be able to adapt more rapidly to the changing market and be assertive where we see poor conduct and consumer harm.
The FCA was widely criticised for its handling of the London Capital & Finance scandal, which saw the licensed firm advertise and sell unregulated, toxic investments called mini bonds to savers, who went on to lose almost all their money.
The regulator says that it will overhaul the rules to make it harder for dishonest firms and individuals to exploit gaps in the financial advertising regime, as well as impose tougher requirements on operators seeking approval for financial promotions.
EY partner Simon Turner said: “The challenges for the industry will not be immaterial. Firms should expect a tightening of regulatory standards and greater scrutiny.”
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