In a debate in Westminster Hall yesterday (April 28), Edwards said there was a need for internet companies, including search engines and social media sites, to patch loopholes in their verification procedures and prevent scammers from using their platforms for illicit activity.
Edwards said: “The majority of people now go online to research and buy everything, from pensions to pet food, holidays to houses, shoes to savings products, but it is for each individual platform to decide what, if any, verification checks it wants to make on businesses taking out adverts on its service.”
However she noted that, following ongoing discussions with the Financial Conduct Authority, Google has updated its financial services policy to make financial services advertisers subject to its business operations verification process.
But she criticised this policy for its "non committal" wording.
She said: "[Google says] 'advertiser accounts may be paused if the advertiser’s business model is unclear and we suspect that their advertising or business practices may cause physical or monetary harm to users'.
“So, Google ‘may’ carry out checks, or they may not. They ‘may’ pause the adverts at the start of the verification process, or they may not."
She added: “I know politicians are often accused of using non-committal language and trying to evade a straight answer, but this is a masterclass.
“It might be time that we in this place send the strong signal that that approach is not enough to protect our constituents, who are definitely being scammed out of their life savings.”
Edwards asked how the government proposes to tackle the issue and whether financial harms will become part of the Online Harms bill as many across the industry have called for.
If not, Edwards called on the government to set out what they plan to do instead and to provide a timetable for action.
As part of the debate, Stephen Timms, chair of the work and pensions committee, said the government had the chance to tackle this “enormous problem” in the forthcoming Online Safety bill, but financial harms have been carved out.
Timms said he hoped the government would reconsider this.
He added: “A call for evidence on online advertising closed a year ago, but as yet nothing at all seems to have come out of that, and asking us to wait for yet further consultation before anything is done would be hopeless.
“The FSCS, the FCA and, I understand, the governor of the Bank of England are urging that scams should be included in the Online Safety bill, so I hope the minister can encourage us on that.”
Edwards finished by saying that the government had a “really urgent problem” affecting thousands of people every year.
She said: “We must sort it quickly. I am confident that we can, because I know from knocking around the cyber-security industry for most of the past decade that the UK has always been a global leader in cyber-security and tackling cyber-crime.
“I have seen our strategy grow, mature and evolve as the threat has. Fraudulent online adverts are a real threat to all our constituents. It is not on the horizon; it is here already, and it has been for several years.
“The alarm bells are sounding, and the problem is growing, so let us grip it now and offer our constituents the protection they all deserve.”
Last week (April 23), Caroline Dinenage, minister of state for digital and culture, said the government is planning to consult on measures to tackle online fraud “later this year”, admitting the scale of the scam problem was “deeply concerning”
The issue of online scams has been raised by the industry many times over the past year.
Earlier this month (April 15), 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.
Recent figures from Action Fraud showed that £78m was reported to have been lost to clone firm investment scams in 2020, with the average loss in each individual case standing at £45,242.
However, the real figure is expected to be higher as many cases will not be reported.
amy.austin@ft.com
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