Microsoft continues to profit from fake ads promising high returns but only delivering misery for fraud victims, warns Which? Money.
Investment scams spiked by 84% in the first half of 2021 and total losses almost doubled from £55.2m in the first half of 2020 to £107.7m, largely driven by fraudulent advertising on search engines and social media, according to UK Finance.
Which? reported in March that search engines Google and Bing were letting scammers run riot on their platforms, by paying to appear at the top of search results. Many pose as genuine financial services firms, inviting people to enter their contact details so that they can call them about bogus investment opportunities.
Under pressure from consumer groups and the financial regulator, Google introduced stricter requirements for firms promoting financial services in the UK, with enforcement taking effect from 6 September 2021.
Campaigner Mark Taber has kept his eye on both search engines and found that Bing appears to be making very little effort to stop rogue firms from taking out ads. And while Google appears to have stamped out most rogue financial advertisers, unregulated advertisers are still slipping through.
Scam ads on Bing
Taber found that someone who used Bing to search for ‘compare best savings rates’ on 20 September would’ve been shown adverts for four firms that were already on the Financial Conduct Authority (FCA) warning list – a list of firms targeting UK investors without appropriate authorisation and potentially running scams (see the screenshot below).
All four sites are no longer active. Which? was unable to contact bestuk-fixedrates2021.com and top-isacomparison.com for comment as the FCA did not list contact details for either website. We emailed seemyfixedratestoday.com, and fixedrateuksavings.com but neither responded.
When we looked at Bing ourselves it took seconds to find an ad for a website on the FCA warning list. We simply searched for ‘compare best savings rates’ on 1 October and clicked on the first advert – see below – taken out by a website called bestcomparison2021.com which claims to offer fixed-rate bonds paying 9.5% AER and has been subject to an FCA warning since 27 September.
It also falsely claims that ‘FixedRateReturnISA Limited trading as bestcomparison2021.com’ is authorised and regulated by the FCA in its terms and conditions. A quick search reveals that there is another live website stating the same lie (fixedrate-investment.com) which was not subject to an FCA warning at the time of writing.
We contacted bestcomparison2021.com and fixedrate-investment.com for comment via the email addresses listed in their privacy policies but both messages bounced.
A Microsoft spokesperson told Which?: ‘We have taken appropriate action and removed this advertisement following a full scan of our system. We have numerous control measures to identify advertisements that do not comply with our policies, and terms of services including the ingestion and blocking of the FCA unauthorised domain lists.’
‘We continually work to improve our tools and processes which include both automated and human intervention. We also encourage people to report possible deceptive or fraudulent ads they may be seeing, so we can review and take necessary action.’
Rogue firm slips through new Google checks
While Google has cracked down on many scam advertisers, by checking that they are FCA-authorised to promote financial services or products, there are ways through its new checks.
For example, Google failed to spot that an advertiser called info.co.uk – which appeared in search results for ‘compare best isa rates’ (see below) – was itself promoting rogue investment website bestcomparison2021.com, mentioned above and on the FCA warning list since 27 September.
info.co.uk is owned by a US company called System1 and describes itself as a ‘metasearch engine’. We attempted to contact this company using the press email address provided, but this message bounced.
Google told Which? action has been taken against info.co.uk, in accordance with its global policies.
A spokesperson said: ‘Protecting consumers and the credible businesses operating in this area is a priority for us. We have several longstanding policies and protections in place for advertisers to follow and further restrictions now require financial services advertisers to be authorised by the FCA with carefully controlled exceptions.’
‘We are vigorously enforcing our new policy to protect our users. If we discover sites that are breaking our policies, we take appropriate action. Last year, we removed 3.1 billion bad ads from our platforms.’
What is the regulator doing?
We think it’s clear that Bing users are at risk.
These examples suggest Bing could do far more to stop scammers from taking out adverts. As well as vetting advertisers more thoroughly, Microsoft needs to do a better job of blocking sites on the FCA warning list to ensure that malicious promoters who pay to take out Bing adverts are investigated and suspended before they can defraud users.
It’s also concerning that scammers have already found sneaky ways to bypass Google’s new checks, though we note that its new controls are broadly effective.
But what about the regulator? The FCA uses its warning list to help investors avoid being scammed, however, it doesn’t appear to be proactively trying to shut these websites down.
Taber told Which? that he was able to contact the registrar of three of the four websites – Namecheap – on Twitter and they were suspended that same day. He questions why the FCA isn’t doing this itself, working with registrars to ensure scam websites are taken down before they can do any damage.
We asked the FCA for a comment but didn’t receive anything at the time of publishing this story.
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Victims can lose everything
Action Fraud figures suggest investors lose an average of £45,000 to clone scams but we’ve heard from victims who lost six-figures sums. The devastation isn’t purely financial – victims responding to a Which? survey in January 2021 reported a negative impact on their mental health (47%), stress in general (44%), anxiety regarding their finances (43%), and physical health (29%).
When a victim transfers money to a criminal, they can lose everything. Under the voluntary Contingent Reimbursement Model (CRM) code banks should reimburse bank transfer fraud victims if they have taken a reasonable level of care when making a payment. But banks don’t have a consistent approach to reimbursement, and they are quick to tell victims that they are at fault.
Only 42% of losses were reimbursed in the first six months of 2021, according to UK Finance. And banks are unfairly denying victims reimbursement in most cases – 73% of APP fraud complaints that went to the Financial Ombudsman Service (FOS) were upheld in favour of consumers in 2020-21.
- Find out more: Which? calls for an end to banks blaming fraud victims
How to stay safe from online investment scams
You can watch the video below for our tips or scroll down for more.
- Ignore unexpected offers Opportunities that come to you out of the blue, whether via a cold call, online advert or through the post, are likely to be either very high-risk or an outright scam. Even if you initiated the contact yourself, don’t assume you’re dealing with a legitimate firm.
- Check the FCA warning list This can be found at fca.org.uk/scamsmart/warning-list and it’s where the regulator records details of firms it knows are operating without permission or running scams. But even if a firm isn’t on the list, this doesn’t mean it’s not a scam.
- Check the Financial Services Register This can be found at fca.org.uk/register and it will help you to see if you’re dealing with a genuine, authorised firm. Access the register via the FCA website, rather than via an email link or website of a firm you’ve been dealing with. Check the firm’s permissions match the service you’re being offered and only use the contact details listed on the register, not the ones you’re given. If there are no contact details on the register or the firm claims they’re out of date, call the FCA on 0800 111 6768.
- Consider getting independent financial advice or guidance A financial adviser can recommend specific investments to you based on your situation and goals. They must be regulated by the FCA. For more general information about your investment options, you can use free guidance services, such as Money Helper.
- Be careful with your personal details Avoid entering contact details on unknown sites, particularly those advertising on search engines and social media, as you risk being targeted with endless scams.