Scammers will not be stopped by online safety bill

The way that scams constantly evolve to find new ways to target victims means that no matter how hard the government and industry tries, there will never be a point where we get to say goodbye to pension scams for good.

But this is not for want of trying. The government has finally succumbed to pressure from the industry and included paid-for adverts in the scope of the online safety bill.

Essentially, this means social media platforms and search engines will have a legal duty to prevent paid-for fraudulent adverts appearing on their services. This is in the hope that fewer people will be scammed through this method.

While any move to put a stop to scams is welcome, the phrase 'shutting the stable door after the horse has bolted' comes to mind here.

The government seems adamant in insisting that scams are not a crime that should be taken seriously. We saw this when Prime Minister Boris Johnson was accused of not taking fraud seriously after he failed to include it in crime statistics.

If the government is unable to change this mindset then rules and procedures put in place to stop scams will also be implemented when it is too late and too many people have lost hundreds of thousands of pounds to fraudsters.

The problem is getting worse. Data showed more than £30mn had been lost to pension scammers between 2017 and August 2020, but this is just the tip of the iceberg as many instances of fraud go unreported.

Scammers evolve

While the government takes a back seat on this issue, scammers are evolving. Including pre-paid ads in regulation may come as a barrier to fraudsters but they will simply find another loophole to exploit. 

We have seen this with the pensions cold-calling ban in 2019. Fraudsters were no longer allowed to phone people about their pension to try and get them to part with their money, so instead they focused their attention online and this is likely to happen again.

The success of the new measures will be determined by the severity of enforcement action against offenders. At the moment we do not know what this will look like, but it is likely that only large fines and possibly prison time will stop fraudsters in their tracks.

While targeting fraudsters is needed, more should be done to educate the public.

Even as a financial journalist, there have been times where I have nearly fallen for their tricks because it has been nigh on impossible to tell the difference between the scam communication and a legitimate communication from, say, a pension provider.

This is what I think we need to tackle first: taking away the perceived embarrassment of being tricked by a fraudster. If we somehow manage to do this then more scams will be reported, methods used to con people out of their money will be identified and the government can move to address this sooner rather than later.

There is no one-stop solution for stopping scams. Consumers, providers, advisers, website operators and MPs all need to work in tandem.

Will we ever get to a point where no scams exist? Sadly, I think not. But anything that can be done to prevent as many people as possible from falling victim to a scam is something we should shout about.

Amy Austin is news editor of FTAdviser