EU helpless against big tech? Ireland calls for change, Poland is skeptical

A group of EU member states are pushing the European Commission to force big tech to take responsibility for combating investment fraud on their platforms. The initiative, led by Ireland, has encountered obstacles. Poland, which has its own idea, remains skeptical.

EU helpless against big tech? Ireland calls for change, Poland is skeptical

photo: Przemek Klos / / Shutterstock

The European Union is currently working on regulations that would force companies like PayPal and Visa, as well as banks, to automatically refund money to customers defrauded by cybercriminals. As reported by the Financial Times, as part of the draft regulation of payment services, which is currently being negotiated between EU countries, an amendment proposed by the Irish Ministry of Finance has just appeared.

Ireland’s proposal, which is gaining support from other member states, would require digital giants to verify the credibility of advertisers before publishing their material. Under the amendment, seen by the Financial Times, only registered financial services providers would be allowed to advertise investment products in the European Union .

Online fraudsters using professional ads to trick users into giving away their personal details defrauded Europeans of €4.3 billion in 2022, according to the latest EU statistics. Bank of Ireland, the country’s largest bank and a champion of Ireland’s proposed regulatory changes, says more than 75% of customer losses last year were due to investment fraud.

Poland unconvinced

According to the Financial Times, Poland, which currently holds the EU presidency and is responsible for building consensus around the law being developed, remains unconvinced by the proposal put forward by Ireland. Our country has put forward another idea, consisting of:

simplifying communication between payment service providers and platforms”, which would then “remove or block access to content related to the reported fraud.

Opponents of this solution point out that it would act after the fact and be ineffective, and accuse officials of lacking understanding of the nature of investment fraud and the existing loophole in the regulations.

– When you report fraud via social media platforms, it's over and done with – said Brian Hayes, president of the Banking and Payments Federation Ireland, as quoted by the Financial Times. – The European Commission is trying to encourage customers to invest in financial markets… But if something like this happens to a consumer, they will be discouraged from investing forever – the expert added.

CERT Recommendations

Expanding the team of Polish-speaking moderators, shortening the response time to reports, and using the Warning List (the same one used by telecommunications network providers to block access to malicious websites) are some of the proposals submitted to Meta by specialists from CERT Polska in December last year, the aim of which would be to combat fraud on Facebook and Instagram more effectively.

The organization had previously published a detailed report explaining how criminals use social media to rob Poles. A link to the material was also posted on Facebook, which removed it shortly after publication and restored it only after protests from CERT Polska.

“For verification purposes, from January to November 2024, we tested reporting ads that we considered fraudulent from a standard Facebook user account. Of the 122 reported malicious ads, only 10 were removed. More precisely, in 106 cases (86.8%) the reports were closed with the status “We did not remove the ad”, in 10 cases the ad was removed, and in 6 we did not receive a response,” reads the CERT report.

Advertisements for investment scams online can be published on a mass scale and then removed at any time (usually after the damage has been done). Their short lifespan means that they often go unnoticed by regulators. Meanwhile, digital giants allow fraudsters to publish new, similar ads, only in a modified form.

In this way, the circle closes and despite subsequent social campaigns conducted by the Financial Supervision Authority and other institutions, the number of people defrauded is constantly growing. Victims do not recover their money in most cases.

M.M.

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