The chairman of the Treasury Committee, Mel Stride, has written to four tech giants asking for details on what policies they have in place to combat online fraud and protect savers.
In letters to Microsoft, Twitter, Snapchat and TikTok, dated November 5, Stride requested information on their advertising policies for financial services and asked whether firms offering investment opportunities must be authorised by the Financial Conduct Authority (FCA) in order to advertise on their platform.
In a series of questions, Stride also asked how much revenue each platform earned in each of the last three years from paid-for advertising offered by firms which are not authorised by the FCA.
He also asked what policies were in place to compensate users who fall victim to fraudulent content hosted on their platform.
Furthermore, Stride asked: “Have you ever compensated any customer for fraud or other financial loss? If so, how many customers have received compensation, and could you please give an indication of levels of compensation.”
The platforms were also questioned on what meetings they had held with government departments including the Treasury and HM Revenue and Customs about online fraud as well as how much the FCA had paid the platforms in the last three years to warn users about unauthorised advertisements and user-generated content.
Earlier this month Google offered the FCA $3m (£2.19m) worth of ad credits to help fight online scams and pledged a further $2m (£1.46m) in credits to support industry scam awareness campaigns.
Stride said: “Online platforms have changed the way we live, work and socialise. However, it’s clear that fraud is rapidly rising and ruining people’s lives. Scammers seem to act with impunity online and their actions can have devastating consequences.
“As a committee, we are investigating the causes, scale and effects of economic crime. We want to gain a clearer understanding of the actions tech companies are taking to combat fraud and protect consumers online.”
He added: “It is also imperative that the government takes further action in this area. We have long suggested that including fraudulent advertisements within the scope of the Online Safety bill would be a good place to start.
“Without coordinated action, I fear many more people will sadly fall victim to these scammers.”
The platforms are expected to reply by the end of this month.
The industry has come together on scams recently, with 17 groups, including adviser trade body Pimfa, calling for the Online Safety bill to include scam ads to ensure consumers are better protected against the harm caused by fraudsters.
In the Queen’s Speech earlier this year (May 11), a new version of the Online Safety bill was introduced to include financial fraud and user-generated online scams but not fraud via advertising, emails or cloned websites.
So far the government has stood firm on this decision but said it would introduce separate legislation for online ads.