Once enacted, the largest social media sites will also be required to address the handling of content that is legal “but could cause significant physical or psychological harm to adults”.
Misinformation is targeted here but the appalling rise in adult financial vulnerability through the pandemic - the Financial Conduct Authority October survey, identified 27.7m adults in the UK as now being financially vulnerable - begs the question as to why the bill does not currently cover online scams or fraud?
In 2020, investment frauds accounted for less than 10 per cent of all reported crimes but 25 per cent of all financial lossesThe stream of online financial fraud has, over the last year, become a torrent. Action Fraud figures for 2020 show there were 356,649 reported cases of fraud, with an estimated cost of £2.1bn.
Of the total, investment frauds that encourage consumers to buy unsuitable, or non-existent, investment products, pension liberation scams, Boiler Room scams and Ponzi or Pyramid schemes, accounted for less than 10 per cent of all reported crimes (20,152 reports) but 25 per cent of all financial losses, at £501m.
Additionally, recent figures from the same source showed that £78m was lost to cloned website fraud, where fraudsters copy an investment firm’s website in order to steal from unsuspecting consumers. This is an increasing problem for firms in our sector.
Given that the National Crime Agency (NCA) believes that only 20 per cent of frauds are ever reported, it is believed the number of victims of fraud, and the amount of money lost, is far higher than currently being reported, causing genuine anguish for many.
Surely, this is compelling evidence that an urgent review of the priorities within the Online Safety Bill is not only advisable but essential in providing support to those most in need.
The impact of this type of crime on the financial and mental wellbeing of individuals and their families can be devastating and the figures show that it is becoming an ever-present danger in our daily lives.
A large number of victims of fraud lose their entire life savings and the danger is that if we do not act now as an industry, together with the government and regulators, online fraud will only get worse.
At a time when we need to be building resilience, this undermines our profession, not least by contributing to the disastrous increase in the Financial Services Compensation Scheme levy.
Ultimately, though, this also does significant harm to the perception of our industry, precisely when we need to be building trust and promoting the sector as a vital component to an individual's financial wellbeing kitbag.
Most online scams could be prevented with the cooperation of Domain Name Registration Services, Internet Service Providers and online platforms such as social media and search engines, but we need a legal framework and genuine enforcement procedures if we are to stop online fraud becoming pervasive.
To succeed in this, we must include economic harm within the Online Safety Bill. To this end Pimfa will be continuing to lobby government and working with other interested stakeholders to come up with a solution that prevents online fraudsters reaching their targets.
I would also encourage members and non-members alike to work with us in this effort and to contact us if they want to know more about how they can get involved in this vital campaign.
Liz Field is chief executive of Pimfa
