By Phoebe Seers, Tommy Reggiori Wilkes and Jeff Horwitz
LONDON/SAN FRANCISCO, March 18 (Reuters) - U.S. tech giant Meta has repeatedly failed to stop illegal ads for high-risk financial products running on its platforms in Britain, despite committing to block them, according to a review by the country's financial regulator.
Britain's Financial Conduct Authority found that during one week in November, 1,052 ads for currency trading and certain complex financial instruments were posted on Meta's platforms
by advertisers not authorised by the regulator to promote them.
What's more, 56% of those ads were from an unspecified number of unauthorised advertisers the FCA had already flagged to Meta, according to the results of the review seen by Reuters and reported here for the first time.
Worldwide, billions of users of Meta's platforms have been exposed to ads for fraudulent e-commerce and investment schemes, illegal online casinos and banned medical products, according to internal Meta documents previously reported by Reuters.
Britain's FCA warned last year that people were increasingly being targeted on social media by online trading scams where fraudsters offer currency trades. Its review was an attempt to see how successful Meta has been at weeding out the rogue ads.
Asked about the FCA's findings, Ryan Daniels, a spokesperson for Meta, said it fights fraud and scams aggressively on a global level and takes swift action on the vast majority of reports within days.
The regulator focused on Meta's platforms - which include Facebook, Instagram and WhatsApp - because they carry a disproportionate amount of suspicious financial ads, a person familiar with the FCA's work said.
"Fraud is the most common crime in the UK," an FCA spokesperson said. "With over half of some scams originating on their platforms, it's vital Meta steps up and uses its tools to protect users from scam content."
The regulator repeated its review of posts on Meta for another week in December. It again found that a small number of repeat offenders were responsible for the majority of the illegal ads it discovered, the person familiar with the FCA's work said, without giving a breakdown of the number of illegal ads or repeat offenders.
The person said that despite regular engagement with Meta over the issue of scam ads, the FCA has failed to see a material difference in its approach and will continue to test the company's controls and monitoring systems.
"Any suggestion that we ignore FCA reports misrepresents our ongoing efforts to protect people," Meta's Daniels said.
The company said further that advertisers running financial services ads in Britain were required to be authorised by the FCA and were responsible for complying with applicable law.
LEGAL BLACK HOLE
Britain's Online Safety Act, which allows regulators to fine social media companies up to 10% of global revenue for running illegal user-generated content, started coming into force in March 2025. However, the provision giving them power to take action over scam ads which have been paid for has been delayed until at least 2027.
In the absence of legislation, Meta made a voluntary commitment back in 2022 to only allow firms authorised by the financial regulator to run financial services advertisements and updated its UK policy to reflect that commitment.
The FCA has no power to take action against Meta itself, because it is regulated by communications watchdog Ofcom. When it comes to paid-for scam ads, Ofcom also remains powerless until the provision in the Online Safety Act comes into effect.
"We're working at pace to implement this. The timeline has been affected by factors beyond our control, in particular a legal challenge against the government," an Ofcom spokesperson said, adding that it had proposed social media companies use automated technology to detect and remove fraudulent content.
The FCA can take action against unauthorised advertisers for running financial ads on social media platforms, although many of them are outside Britain.
It issues alerts to consumers to avoid unauthorised firms, has charged and fined unauthorised influencers in Britain for promoting high-risk products on social media and regularly asks social media platforms to take down illegal financial ads.
Britain's National Crime Agency, meanwhile, has successfully taken down financial scam networks targeting Britons on social media platforms from countries such as Nigeria.
Fraud Minister David Hanson said he would continue to raise the issue of the need for tech firms to do more to tackle scams with Meta and other platforms until the fraudulent ad provision in the Online Safety Act comes into force.
"In the meantime ... I expect them to go further and faster in standing up to this threat," he told Reuters.
The FCA's review was limited to ads for foreign exchange trading and contracts for difference (CFDs) because it has identified such products as being of particularly high risk of harming consumers, the person familiar with the FCA's work said.
CFDs are complex derivative products used to speculate on price movements on a wide range of assets, including currencies. Because losses can far exceed initial investments, the FCA mandates strict protections for investors, such as requiring firms to disclose what proportion of their clients lost money.
Reuters was unable to determine the total number of currency and CFD ads posted on Meta's platforms during the weeks the FCA reviewed. Meta did not respond when asked for a weekly tally.
ROGUE AD RUNS IN BRITAIN, BLOCKED IN AUSTRALIA
To test how effective Meta is at blocking potential scams under different regulatory regimes, a Reuters reporter created a suspicious investment promotion to run on Facebook teasing 10% returns a week.
Reuters tried to run the ad in Britain - where Meta doesn't risk any financial penalty for running scam ads - and Australia, where it faces fines of up to A$50 million ($35 million) if it fails to detect scams under that country's mandatory approach to financial advertiser verification.
During the ad verification process for both countries, Meta asked Reuters to declare if the ad was for financial services by ticking a box. To try to emulate scammers, it didn't tick the box in either case.
The ad ran in Britain without further scrutiny. Reuters pulled the ad shortly after it was approved by Meta.
In Australia, even though Reuters hadn't flagged the ad as being for financial services, Meta blocked it anyway and asked the news agency to prove it was authorised by Australia's financial regulator to run ads for financial services.
Meta said in emailed comments that the ad posted by Reuters in Australia was caught because of enhancements in its process in that country for financial services verification, without explaining what those enhancements were.
Meta said it was working to identify more effective safeguards that worked globally. It said it had increased the percentage of ad revenue globally coming from verified advertisers to 70% in 2025 from 55% at the end of 2024.
Martin Lewis, a consumer rights campaigner in Britain, said big tech companies needed to stop framing the fight against scam adverts as a technological problem.
"This is a financial problem. If you spend enough money, you can stop the scammers, and we need to change the economics so it is worth their while to spend the money to stop the scammers," he told Reuters.
RESET TECH DATA
Reset Tech, a digital rights advocacy group, examined Meta's ad library over a two-week period in July and August.
It looked for ads referencing three British banks - Barclays, HSBC and Revolut - and then looked at which of those ads had three or more "red-flags", such as offers of impossible returns, suspicious domains or fake endorsements.
Reset Tech found 51.1% of the 2,913 ads it identified were likely scams, such as suspected fraudulent investments schemes, credit offers or government support schemes. It estimated Meta could host 29,068 scam ads referencing the banks over a year, translating into 53.6 million cumulative exposures across Britain and the EU.
Reuters couldn't independently verify Reset's findings, which haven't previously been reported.
Meta said Reset Tech's report employed subjective and unreliable classification criteria to determine "suspected scams" and "suspicious ads", none of which the advocacy group could verify as being actual scams.
Meta said the report showed suspected scams had significantly lower reach than legitimate ads and that was proof its systems were successfully limiting the distribution of potentially violating content.
Barclays said a survey it commissioned last year of 2,000 people in Britain showed eight in 10 think tech firms should do more to stop scams. It said banks, social media platforms, tech firms and telecoms companies should work together to stop fraud.
Revolut said Meta's platforms were the biggest source of authorised fraud reported to it. The bank said Meta must act urgently to improve the effectiveness of its verification systems and show its anti-scam initiatives were having a tangible impact.
HSBC declined to comment.
($1 = 1.4021 Australian dollars)
(Reporting by Phoebe Seers and Tommy Reggiori Wilkes in London, Jeff Horwitz in San Francisco; Editing by David Clarke)
