A coalition of consumer groups, charities and financial services industry bodies have come together to renew calls for the government to include paid for online adverts within the scope of the Online Safety bill.
The Personal Investment Management and Financial Advice Association, the Investment Association, Which?, UK Finance, Martin Lewis and MoneySavingExpert, among others, warned the government in a statement published yesterday (July 21), that its approach to tackling online fraud was “flawed”.
Instead, it said, online advertising would be dealt with through a separate review of advertising regulations which is in its infancy.
The industry coalition said: “[The government's approach] will likely lead to complex and muddled regulations, and far worse consumer outcomes than an Online Safety bill with a comprehensive approach to online fraud.
“While we welcome the recent inclusion in the bill of fraud carried out through user generated content and fake profiles on social media websites, there is still a long way to go. Failing to include online advertising in the bill leaves too much room for criminals to exploit online systems.”
The group said this view was backed by the Financial Conduct Authority, Bank of England, City of London Police and Work and Pensions committee and Treasury committee, who have all commented that the scope of the Online Safety bill should be expanded to include fraud carried out via online advertising.
It added: “We do agree with the government that the impact of these frauds is often devastating, not just financially but also emotionally. That’s why we urge ministers to reconsider their current plan, and make sure the bill protects as many consumers as possible from the full extent of the devastation caused by scams.”
It comes as research from Which? found the growing shift towards everyday tasks being carried out online following the onset of the pandemic has led to a devastating surge in scams.
Action Fraud figures, in the year to April 2021, show 413,553 instances of fraud were reported - an increase of a third (33 per cent) on the previous 12 months.
More than £2.3bn was lost by victims as a result, causing huge financial and mental distress.
In May 17 groups - including Pimfa - joined forces to warn about online scams and lobbied the government to include methods to tackle this issue in its Online Safety bill.
In a letter dated June 16, the group received a response from the government, which said that paid-for advertising would not be in scope of the Online Safety bill but that it was considering tougher regulation on online advertising to clamp down on scams through the Online Advertising Programme, led by the Department for Digital, Culture, Media & Sport.
The programme will develop a structured response to challenges raised by online advertising, including standards about the placement and content of advertising, and the role advertising can play in enabling online fraud, which will be consulted on later this year.