The Government has sided against US tech multinationals in a row over financial investment scams being pushed on social media platforms by proposing stricter rules for online advertisements.
Documents show the Department of Finance privately argued social media platforms need to do more to tackle adverts claiming to promote lucrative financial investment opportunities, which in reality are scams aimed at stealing people’s savings.
The department proposed that social media companies be made vet who can post adverts promoting financial investment schemes on popular platforms like Facebook, Instagram, X and TikTok.
Irish officials suggested that the changes be included in reforms of banking and financial payment regulations currently being negotiated at European Union level.
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The department’s proposal, seen by The Irish Times, said criminals were targeting people on social media, by “promising what is often billed as a once in a lifetime opportunity for investments”.
The adverts contained links to websites that look like legitimate investment firms, to trick people to first hand over their contact details.
The department said this was followed by a “lengthy process of grooming”. The fraudster then convinced a victim to transfer money – sometimes regular payments made over a lengthy period of time – for what they believe to be a legitimate financial investment.
The online adverts usually contain bogus testimonials claiming to be from high-profile politicians and journalists, promising huge returns for modest investments.
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The department said platforms should be required to verify that those placing adverts pushing investment opportunities were registered financial service providers.
The submission was circulated to finance officials from other EU states and discussed at a December 2024 meeting in Brussels.
In a further February 14th paper, the department said that it was not calling for tech giants to “monitor” the content of adverts. The proposal “merely requires that before an entity becomes an advertiser, the platform verifies that it is an authorised financial service provider”, officials told EU counterparts.
The Irish banking sector is supportive of the change, as a way to limit instances of fraud that have become a big problem for the industry.
Lobbyists from tech multinationals have been busy making representations to EU officials and diplomats to push back against the idea, according to sources in Dublin and Brussels.
One official with knowledge of the internal EU discussions said there was support from many other countries to crack down on the scam adverts.
However, momentum behind the Irish proposal has stalled in recent weeks. Instead it seems likely EU states will support a compromise, where online platforms would be obligated to make it easier for the financial industry to report suspected fraudulent adverts.
Fine Gael MEP Regina Doherty raised the matter with European commissioner Henna Virkkunen, who oversees the EU’s strict rules governing digital services.
Ms Doherty said she understood the commission had “disputed” that the problem could be addressed in upcoming changes to EU payment regulations, as Irish officials had suggested.
The responsibility for combating fraud should not only fall on the financial sector, she wrote in an April 29th letter. “It is all too easy to post fake advertisements, purporting to be from recognised financial institutions, and for unsuspecting citizens to be scammed out of their own money before the advert disappears again,” she said.
Some US tech multinationals have begun to take action to tackle scam adverts. Google voluntarily started requiring online advertisers promoting financial services to be verified, a check it rolled out in the Republic last November.
Facebook owner Meta is planning to introduce new technology, for politicians and other public figures, to detect adverts falsely using their image on its platforms.
