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Online scams are large companies. In the EU, according to the most recent figures Online scammers, consumers decided in 2022 of € 4.3 billion. They are increasingly using advanced advertisements, including AI-generated “Deepfakes” of figures, ranging from Elon Musk to the British personal financial expert Martin Lewis, to reveal individuals in fraudulent schemes. The vehicle is often social media platforms, which indirectly benefit from wearing the advertisements. No company, the least of some of the world’s most powerful, could benefit from fraud on this scale.
Although mechanisms improve the repayment of victims, generally by the banking sector, the damage caused by such fraud is enormously. It not only includes the immediate losses and stress for victims and their banks, but also the erosion of trust in respectable sources of information and the financial sector.
However, getting fraudulent material can be a game of “Wack a Mole” -as the Financial Times discovered when DeepFake advertisements were found on Meta platforms that apparently show his columnist Martin Wolf that promoted fraudulent investments. The FT has established that these fakes were seen by millions of users; Many may have lost money because of this. As soon as an advertisement was deleted, others from different accounts emerged, where the systems of Meta are unable to keep track of, although they have now stopped.
Circulation of fraudulent, indeed criminal, material cannot be justified. Given how difficult it is to eradicate advertising afterwards, this is a case in which prevention is better than cure. Social media must have a legal duty in order not to offer an advertising space to fraudsters in the first place. They should be expected to “know their customers” and be held liable, with the correct enforcement and heavy penalties, if they do not block the spread of fraudulent advertisements.
The EU is considering legislation on those lines. The Member States discuss proposals from Brussels to introduce a right to automatic reimbursement of PayPal, Visa, Mastercard and Banks for customers who have been cheated by scammers. But a change from the Irish Ministry of Finance, and to get a grip in other EU capitals, would go further – by claiming legally online platforms to check whether an advertiser is authorized to sell financial services and block it, if not.
Brussels is concerned that the amendment would be contrary to a provision in the EU’s Digital Services Act that online platforms are not obliged to perform broad monitoring of content. There may be prudish about the antagonization of Donald Trump, who wants to bridge the EU regulation of American technology companies.
But having to verify whether financial advertisers are authorized, does not form large -scale monitoring and would only be needed from very large online platforms or search engines. Some are already doing it, or have committed themselves to: Google has a certification program for financial services in 17 countries, while Meta agreed With the British financial behavioral authority in 2022 to prohibit financial advertisements by companies that are not registered with the regulator. And the EU must give priority to robust consumer protection over the protests of the US President and his major technical backers.
A legal obligation to verify financial advertisers would not be the broader problem of celebrities used in scams and promotions that are linked to products that vary from varying Cookware sets Unpleasant dental products. But the fact that sellers of financial products usually have to be registered with supervisors opens a route to block a special harmful online fraud. The EU and the UK must set an example of other areas of law and now take action.