Steve Timms, chairman of the Work and Pensions Committee, has joined calls from the City regulator for internet companies to take responsibility for financial scams promoted on their platforms.
Speaking to FTAdviser, Mr Timms, who is also MP for East Ham, said internet companies such as Google should share responsibility for hosting fraudulent and misleading adverts.
He said: "We do need an obligation on the internet companies - on Google, on Facebook - that they need to take responsibility for what they are putting online at the moment.
"They are getting a lot of money from scammers who are placing adverts on their portals, and a lot of people are falling prey to those. We have to have the internet companies accepting their share of the responsibility for what is going wrong at the moment, and helping to resolve it.
"They should not be hosting material that is criminal, and at the moment, they are."
A spokesperson for the FCA told FTAdviser: “Online platforms, such as search engines and social media platforms, are playing an increasingly significant role in putting consumers at risk of harm, by exposing them to adverts for financial products, ranging from scams and promotions of high-risk investments to false or misleading adverts (which can fall within or outside our jurisdiction)."
Mr Timms also said there was a "fundamental requirement for a change in the law" to combat fraudulent material appearing online, especially with the Financial Conduct Authority revealing last month (January) that clone firm fraud has risen exponentially in 2020 (see image, top).
Currently, the department for Media, Culture and Sport is bringing its Online Harms bill to parliament, which aims to crack down on the potential for terrorist material to be spread online, among other things.
However, the bill does not make provisions for protecting consumers against financial harm being carried out online. This is despite the FCA stating in 2020 that this would be an opportunity to clamp down on scams.
The FCA spokesperson added: "We have been in dialogue with Google for some time and while there has been some progress there is much more that they can do to tackle consumer harm.
"Given the scale of harm that investment fraud causes to consumers, many of whom are vulnerable and need the money they have lost for their retirement, the FCA believes that there is a strong case to include financial harms in the Online Safety bill.”
Mr Timms told FTAdviser: "There is much the government needs to do. Much of this problem is online. Now we are about to see in the House of Commons the government's Online Harms bill.
"Now when the secretary of state for Culture, Media and Sport made a statement about this before Christmas, I pressed him that financial harms need to be within the scope of that bill, and he made it pretty clear within his answer it won't be."