Google has announced a change to its advertisement policy. Going forward the company will only run advertisements for financial products and services only when the advertiser has been verified by the UK Financial Conduct Authority (FCA). This change in policy could be possibly due to the recent FCA-issued ban on Binance from carrying out business operations in the UK.
Google’s New Ad Policy in the UK
This Google Ads Financial Products and Services policy update will apply from August 30 onward. While the policy will come into enforcement enforced from the 6th of September.
Google Ads Users will need to complete the updated verification process before the 6th of September in order to be able to show financial services advertisements to UK citizens.
According to Ronan Harris, a VP and MD for Google UK and Ireland under this new policy, financial services advertisers will be required to demonstrate that they are authorized by the UK Financial Conduct Authority (FCA) or qualify for one of the limited exemptions described in the UK Financial Services verification page.
This requirement covers financial services products both regulated by and not regulated by the UK FCA.
Reason for Google’s New Ad Policy
The UK FCA has issued several warnings to Google regarding misleading ads especially related to financial products and services. For example, crypto businesses promising higher returns to consumers. However, recently the FCA stated that it may take legal action if Google continues to ignore this regulatory requirement.
The FCA had paid Google more than £600,000 in 2020 and 2021 to run “anti-scam” advertisements. However, this did not work for the regulatory authority. Google Ads works on a bidding system. Under this system, scammers can place a higher bid and eventually appear higher than the regulator warnings about financial scams.
For Google, this proved to be a highly lucrative situation requiring no redressal by them. Until now, when the FCA has finally threatened Google with legal action, resulting in Google adding a new policy to use Google Ads.
Based on feedback from the FCA, Google has also updated policies, such as their unreliable claims policy. This update restricts the rates of return a firm can advertise and bans the use of terms that make unrealistic promises of large financial return with minimal risk, effort, or investment.
The company has also introduced a new advertiser identity verification which requires advertisers to submit personal legal identification, business incorporation documents, or other information that proves who they are and the country in which they operate.
FCA’s Plan of Action Against Financial Scams
To further prevent financial scams, the UK Home Office is working on a Fraud Action Plan (FPA). This FPA will be publishing this plan after the 2021 spending review. The government will also be reviewing the Online Advertising Programme and how well the existing regulatory regime is equipped to tackle the challenges posed by the rapid technological developments in online advertising.
The FCA is no longer bound by the European Union rules on financial advertisements, which do not cover online platforms. Therefore, now the UK financial underdog intends to take additional measures to end financial scams through such online platforms.
The FCA has so far issued 1,200 warnings about fraudulent ads on Google platforms, double the amount from 2019, and informed that it will not forgo legal action against Google or other social media platforms if required.
Penser is a UK-based specialist fintech and payments consulting firm with experience working for clients in the digital payments, digital banking, and mobile payments sectors. Our services include:
- Conducting Due Diligence to guide business investment decisions
- Strategic Planning to drive growth and scale business
- Digital Transformation of businesses
- Assisting with restructuring and turnarounds to improve business operations and tackle financial challenges
Get in touch here email@example.com to learn how we can help your business expand globally.