Google is set to tighten its advertising rules in the UK in a bid to crack down on financial scams following pressure from the City watchdog.
The tech giant said all financial services advertisers will have to prove they are authorised by the Financial Conduct Authority (FCA).
The new policy will come into force from 6 September.
It comes after the FCA vowed to use post-Brexit powers to crack down on tech companies such as Google, warning that platforms were not doing enough to tackle online fraud.
The regulator issued 1,200 consumer warnings about scams advertised via social media by fake companies last year — double the number in 2019.
It has called for fraud to be included in upcoming online harms laws, which aim to hold tech firms responsible for the material that appears on their platforms.
The FCA said: “While this is an important step from Google we think a permanent and consistent solution requires legislation.”
A spokesperson added that the watchdog will assess the outcome of the rules changes once they come into effect.
The crackdown comes after lockdown fuelled a rise in the number of scammers trying to take advantage of unsuspecting victims online.
In the last year, more than 700,000 online scams totalling 1.4 million URLs were removed from the internet, according to the National Cyber Security Centre.
Many social media firms and search engines are used by financial services companies to promote their service, though there are miminial checks to determine if the product is a scam.
Financial promotions can only be issued by FCA-approved firms. However, a loophole in EU laws meant these rules did not apply to many foreign tech companies.
Now Brexit has granted the City watchdog with greater powers to crack down on online fraud. The FCA has previously said it will use a so-called dragnet approach to capture suspicious advertising within 24 hours of it appearing online.
“The scale and prevalence of online fraud is a complex challenge which requires collaboration from different sectors and government to form tangible solutions,” said Julian David, chief executive of industry group Tech UK.
“Requiring advertisers to verify their identity with the Financial Conduct Authority is a good step forward demonstrating how working in partnership can provide a greater level of protection against possible fraudulent activity.”