Major digital platforms such as Google and Facebook have been under greater scrutiny over the way their services, particularly through targeted advertisements and taking advantage of algorithms, can be used to spread misinformation.
Misinformation about investments, that is, scam investment products, have been costing Australians millions of dollars of their hard-earned savings.
The ACCC estimates that in 2021, $140 million was lost to online investment scams, with scams related to social media amounting to $26.6 million – up 207% from 2020.
Reputable Australian investment funds have had their brands ‘cloned’, with scammers purporting to offer financial products under their brands and targeting people via social media advertisements, paid search engine results and via messenger applications.
Given the alarming rate at which investment scams are increasing on digital platforms, the FSC believes more needs to be done to protect consumers from significant financial detriment.
In February 2022, the ACCC released a consultation paper seeking feedback on potential new laws for large digital platforms such as Google and Facebook.
One potential solution that the FSC has put forward is that digital platforms should be subject to an industry code of conduct, allowing for industry input and flexibility. This code should impose a duty on digital platforms to only allow paid-for advertisements from financial services providers authorized by ASIC. This echoes a commitment that Google…
