Govt urged to include financial scams in Online Safety Bill

A coalition of 17 organisations has written a joint letter to the Home Secretary and Digital Secretary urging the government to include online scams in its proposed Online Safety Bill.

The letter, addressed to Priti Patel and Oliver Dowden, suggests that existing regulatory frameworks “do not reflect the extent or urgency” of the threat of financial crime.

The organisations that have signed the letter include UK Finance, Which?, the Money and Mental Health Policy Institute, Carnegie UK Trust, the Personal Investment Management and Financial Advice Association (PIMFA), the City of London Corporation, City of London Police, The Investment Association, Association of British Insurers (ABI), MoneySavingExpert and Age UK.

It comes as financial scams have escalated over the past 12 months, with recent Action Fraud figures showing that £1.7bn was reportedly lost to scams in the last year. Many criminals have shifted their activity online, with estimates that in the year to June 2020, 85% of all fraud was cyber-enabled. Action Fraud also believes the true financial losses are likely to be much higher.

In their letter, the organisations wrote: “Online platforms play a pivotal role in enabling criminals to reach and defraud internet users through the hosting, promotion and targeting of fake and fraudulent content on their sites, including adverts that they make significant profits from. Yet platforms have very little legal responsibility for protecting their users, despite often being the best placed to tackle harmful content.

“While we recognise there are initiatives being progressed by the government designed to tackle aspects of online fraud, there is a growing risk that current plans for future regulatory frameworks are not taking a comprehensive approach to the threats faced by consumers and do not reflect the extent or urgency of the problem.”

The coalition of groups has called for online platforms to be given a legal responsibility to protect users from fake and fraudulent content on their sites that lead to scams.

Which? suggested the government now has a “perfect opportunity” to deliver this in its proposed Online Safety Bill, which could be announced as part of next week’s Queen’s Speech on 11 May.

“The biggest online platforms have some of the most sophisticated technology in the world, yet they are failing to use it to protect scam victims who are suffering devastating financial and emotional harm due to the flood of fake and fraudulent content posted online by criminals,” commented Which? CEO, Anabel Hoult.

UK Finance chief executive, David Postings, added: “It’s not right that online giants are effectively profiting twice – once from criminals marketing scams on their platforms and again from organisations having to advertise fraud warnings to consumers.

“We are strongly calling on the government to take a major step forward by including economic crime in the upcoming Online Safety Bill and helping ensure tech giants take responsibility for their part in protecting consumers from the scourge of online fraud.”

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