The UK Government has taken the first step in tackling online investment scams by including user-generated fraud within scope of the Online Safety Bill.
While welcoming the measures, the limited scope of the provisions in the Bill continues to vex campaigning bodies.
Tim Fassam, director of government relations and policy at Pimfa comments: “While the Bill attempts to tackle fraud via user generated content on social media sites and dating apps, paid for online adverts from fraudsters and cloned – and therefore fake – investment firm websites appear conspicuous by their absence from it.
Debbie Barton, financial crime prevention expert at Quilter, adds: “With each day that passes, around £214,000 is lost to UK consumers from clone firm fraud, so the government should not kick the can even further down the road and should take action with this Bill.
“It would be hard to explain to an investment scam victim why they have suffered as a result of scam facilitated through an online advert, whereas they would receive protections if the scam was instead published by a user on social media.”
The work and pensions comittee, which in March called on the Government to legislate against online investment fraud, has also waded in.
Committee chair Stephen Timms, says: “Ministers must now work to ensure that the promised Online Safety Bill lives up to its name and be clear that the legislation will cover scams. Only by holding internet giants truly responsible for the content which they promote will savers start to receive the protection they desperately need from scammers and fraudsters.”
Pimfa’s Fassam is encouraged that the Bill will face pre-legislative scrutiny before being formally introduced to the House of Commons.
“We look forward to working with Ministers and MPs in order to ensure that all financial harms, which have a devasting impact on the financial and mental wellbeing of victims, are included in the Bill,” he says. “As we, and our partners, have said from the beginning of this campaign, social media websites, search engines and domain name registration services all need to take responsibility for preventing online fraudsters from operating on their platforms.”