The accountability of Big Tech platforms in preventing financial and investment scams has been brought before the European Commission (EC).
Ireland has led calls among European Union (EU) member states for the EC to impose tougher rules on social media platforms to monitor and prevent financial and investment scams from being displayed to the public.
The Commission is currently reviewing a proposal to grant consumers an “automatic right to reimbursement” from banks and payment providers—such as PayPal, Visa, and Mastercard—if they fall victim to online scams.
The proposal is part of the legislative package for the yet-to-be-finalised Third Payment Services Directive (PSD3), which was delayed in 2024 due to extensive feedback submitted to the European Council during its review phase.
The Financial Times reported that Ireland’s Department of Finance has submitted an amendment that would require social media platforms to verify that advertisers are licensed financial service providers before allowing financial ads to be published. The FT notes that the amendment carries weight, with “about half of EU countries” expressing support, according to sources close to negotiations.
Combating online fraud has become a priority for the EU, with fraudulent online transactions across the European Economic Area amounting to €4.3bn in 2022, according to figures from the European Central Bank (ECB).
Ireland argued that efforts to limit online scams should primarily focus on Big Tech firms—such as Google, Meta (Facebook and Instagram), and X (formerly Twitter)—which are often the first point of contact for fraudsters. It recommends mandatory screening of financial advertisers, noting that current self-regulatory practices are insufficient.
However, the Irish proposal may face legal obstacles. The European Commission argues that requiring platforms to vet advertisers could conflict with the Digital Services Act, which prohibits platforms from being required to broadly monitor content.
Mandating verification of all financial advertisers would amount to “general monitoring”—a technicality explicitly prohibited under EU law. Furthermore, Big Tech firms may argue that verifying advertisers’ compliance with the diverse financial regulations of all 27 EU member states is technically complex and legally uncertain.
While Ireland—backed by institutions such as the Bank of Ireland—insists that self-regulation is inadequate. Poland has proposed a softer alternative: improving communication between platforms and payment providers to enable quicker takedowns of fraudulent content
Aware of legal conflicts, Ireland maintains that verifying advertisers should be seen as a targeted measure, not general monitoring. The distinction is key, as Ireland views advertising verification as essential for systemic preventing fraud.
“We can’t leave glaringly obvious holes in legislation that are allowing criminals to defraud people of their life savings,” said Regina Doherty, an Irish MEP.
Industry Reaction
Combatting online scams should be prioritised by the EU, as member states require urgent clarity on the matter cites Jonathan Frost, Director of Global Advisory for EMEA at BioCatch, who commented: “The European Commission’s proposed shared liability model is a step in the right direction but the proposed amendment to require Big Tech to verify advertisers before publishing ads will truly raise the bar and increase accountability beyond the financial services sector.
“Online advertising platforms often host illegal content that leads to fraud while generating significant revenues for the platform itself. Among the most damaging is investment fraud, which often leads to severe financial losses for consumers. The least we can expect of these platforms is that they promptly remove illegal content. When they fail to do so, they must be held liable for the harm caused.
Industry experts warn that scam ads are often posted and removed before regulators can intervene, leaving consumers without recourse and enabling fraudsters to reappear with similar schemes in different formats.
Silvija Krupena, Director of the Financial Intelligence Unit at RedCompass Labs, commented: “This is a welcome and long overdue initiative by EU member states, led by Ireland, to extend accountability for fraud losses to the tech platforms where most scams originate. However, fraudsters operate across borders using tech platforms, so other jurisdictions must follow suit to ensure the door is firmly shut.
“With billions stolen from Europeans every year through scams that start online, we’ve seen no comparable urgency for fraud prevention. Scam warnings, advertiser verification, and user education should be the norm, not the exception.
“These platforms aren’t just passive hosts; they’re the front door to scams. They must be legally required to verify financial advertisers and help prevent harm before it happens. Real progress, however, demands coordinated global action—from social media and Big Tech to the financial sector, regulators, and law enforcement.”
The EC also seeks greater oversight and accountability of US tech platforms operating in Europe, as member states face political pressure from President Donald Trump’s administration to ease regulatory controls.
As it stands, PSD3 is expected to include provisions on consumer rights for victims of payment fraud, alongside new measures to enhance consumer protection and streamline authorisation processes for payment institutions. The EC’s proposal recommends that PSD3 be transposed into national law within 18 months of its entry into force (a timeline to be determined), establishing a new EU framework for harmonised payment regulation.
