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MPs demand action to stop another London Capital & Finance

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Ministers face further scandals on the scale of London Capital & Finance unless they tackle investment fraud with Online Safety Bill, MPs warn

  • LCF – an unregulated ‘mini-bond’ seller – left 11,600 investors facing losses of more than £200m when it collapsed two years ago
  • Many savers were drawn to the ill-fated scheme through online advertising, which LCF paid Google £20 million to display
  • It has prompted MPs from the Treasury Committee to call on the government to crack down on the advertising of financial products
  • They are demanding that online advertising be included in the scope of the Online Security Act currently being discussed by Parliament










Ministers will face further scandals on the scale of London Capital & Finance unless they tackle investment fraud with the Online Safety Bill, MPs warned.

LCF – an unregulated seller of ‘mini-bonds’ – left 11,600 investors facing losses of more than £200m when it collapsed two years ago. The company and its directors are under investigation for suspected fraud.

Many savers were drawn to the ill-fated scheme through online advertising, which LCF paid Google £20 million to display.

Warnings: MPs demand that online advertising be included in the scope of the online security law currently being discussed by parliament

It has prompted MPs from the Finance Committee to call on the government to curb the advertising of financial products to help prevent similar disasters in the future.

They are demanding that online advertising be included in the scope of the online safety law currently before parliament so that internet companies will be forced to check the credentials of advertisers behind promotions.

It ties in with Mail’s Stamp Out Investment Fraud campaign, which also calls for financial fraud and fake advertising to be covered under the account.

Mel Stride, the committee chair, said: “The collapse of LCF has hit many investors hard and revealed significant regulatory flaws. However, it is not yet clear whether the cabinet will include fraudulent advertisements within the scope of the bill. To prevent fraud in the future, this is an issue that needs to be addressed.’

The Mail’s campaign is backed by regulators and industry giants such as Lloyds Bank, HSBC, Aviva and Hargreaves Lansdown, but Culture Secretary Oliver Dowden has so far refused to expand the scope of the legislation.

But the Treasury committee says ministers must “step in urgently” to prevent further scandals such as LCF.

They say that the Financial Conduct Authority, the city’s watchdog, should be allowed to expand its remit and that internet platforms should be required by law to remove scam ads. Ministers insist that the online safety law is not the right way to tackle scam ads.

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