Adviser trade body teams up to push for online scam rules

Adviser trade body teams up to push for online scam rules

Seventeen groups - including adviser trade body Pimfa - have joined forces to warn about online scams and lobby the government to include methods to tackle this issue in its upcoming Online Safety Bill.

In a joint letter to the Home Secretary and Digital Secretary, the organisations echoed industry-wide calls to include online scams in its proposed Online Safety Bill so consumers are better protected against the financial and emotional harm caused by fraudsters. 

The Online Safety Bill, which is expected to be considered by Parliament this year and could be mentioned in the Queen’s Speech next week (May 11), is designed to provide a new regulatory framework for online safety. 

Pimfa was joined by Which?, the City of London Police, The Investment Association, the Association of British Insurers and Age UK.

The letter warns current plans to tackle online crime do not go far enough.

The organisations said: “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.”

Scams have escalated over the past year, with Action Fraud figures showing £1.7bn was reportedly lost to scams in the last year. 

Many criminals have shifted their activity online and it is estimated that in the year to June 2020, 85 per cent of all fraud was cyber-enabled.

However, the real figure is expected to be higher as many cases will not be reported.

Meanwhile, UK Finance figures show a 32 per cent increase in investment scam cases in 2020, which are often promoted through adverts on search engines and social media offering higher than average returns.

The organisations are calling for online platforms to be given a legal responsibility to protect users from fake and fraudulent content on their sites that lead to scams. 

Liz Field, chief executive of Pimfa, said: “The Online Safety Bill could provide a clear legal framework that would protect consumers from ever more sophisticated online fraud, largely perpetrated by organised criminals. 

“Pimfa and our partners in this campaign continue to urge the government to include financial harm in the Online Safety Bill. Doing so would save thousands of victims suffering enormous financial and mental distress and would be one of the best possible ways to disrupt organised crime.”

The issue of online scams has been raised by the industry many times over the past year.

Last month, Quilter chief executive Paul Feeney wrote to the prime minister asking for online investment scams to be included in the government’s Online Safety Bill.