FSC member Vanguard backed the push for a code of conduct, having seen its own potential investors increasingly targeted by scammers.
John Mabbott, head of corporate security and fraud at Vanguard in Asia Pacific, said the investment firm has seen “a noticeable increase in the level and scale of scam activity in investment over the past two years.
“We fully support the measures proposed by the FSC and have advocated for stronger regulation to protect people seeking information about potential investment choices,” Mabbott said.
“The criminals responsible for a widely reported 2021 bond scam that impersonated a number of financial services providers, including Vanguard, demonstrated the increasingly sophisticated nature of this type of illegal activity, leaving potential investors extremely vulnerable in what can already be a complex financial decision. »
In March, the ACCC launched legal action against Facebook’s parent company, Meta, for posting fraudulent crypto advertisements using photographs of prominent Australians such as Fortescue boss Andrew Forrest and l Former Premier of New South Wales, Mike Baird.
The FSC submission indicates that due to the gatekeeping role of digital platforms such as Facebook and Google, companies can help prevent harm to consumers, particularly through the provision of ad technology services.
“We are calling for the implementation of a mandatory industry code of conduct for tech giants that only allows paid advertising from ASIC-approved financial services providers, and a commitment to remove content from their platforms,” Mr. Briggs said.
“Given the alarming rate at which investment scams are increasing on digital platforms such as Google and Facebook, the FSC believes that more needs to be done to protect consumers from significant financial harm. »
The advice says that in the UK, Google has pledged to only allow financial services advertisers verified by the Financial Conduct Authority, while content from unverified advertisers is blocked.
The FSC says a similar arrangement must be in place on all major digital platforms under the mandatory code of conduct, calling on the Australian Securities and Investments Commission to play a role similar to that of the FCA in verification advertisers.
The ACCC estimates that social media scams totaled $26.6 million last year, up 207% from 2020.