Consumers will continue to be defrauded on a large scale without decisive action to tackle scams committed through paid-for adverts, MPs have warned.
The Treasury Committee and the Work and Pensions Committee have written to Boris Johnson, urging him to look again at the issue.
The letter says: “Legislating against fraud committed through paid-for advertisement has strong cross-party support and not doing so will result in potentially large financial losses to the public.
“We would, therefore, strongly encourage you to look at this again.”
The committees said the letter follows the Prime Minister’s promise this month at the Liaison Committee that he would look at the Online Safety Bill if it was “in some way inadequate” in tackling online fraud.
The Bill, which was announced in the Queen’s Speech, would legislate against certain types of fraud online but not against the same fraud committed through a paid-for advert.
Without decisive action, innocent consumers will continue to be defrauded on a large scaleMel Stride, Treasury Committee chair
Mel Stride, chair of the Treasury Committee, said: “It is very disappointing that the Government has not yet chosen to include fraudulent advertising in the Online Safety Bill.
“As a committee we are calling on the Government to do so in order to address online advertising scams, and to prevent further individuals being offered fraudulent financial products. Without decisive action, innocent consumers will continue to be defrauded on a large scale.”
Stephen Timms, chair of the Work and Pensions Committee, said: “The Prime Minister told us that the Bill will tackle fraud – but consumer groups, the financial regulators and even the Governor of the Bank of England say it’s not enough.
“His offer to look again at the legislation is very welcome. He must listen to the numerous expert voices warning of the devastating harm that scams on the internet are causing, and ensure that action is taken to protect the many thousands of people who risk huge financial loss when they should be safe online.”
The Work and Pensions Committee called for a crackdown on online fraud in its report on pension scams in March.
The Treasury Committee recommended that the Government address fraud via online advertising in the Online Safety Bill in its report on the Financial Conduct Authority’s (FCA) regulation of London Capital and Finance (LCF). The committee is also conducting an inquiry into economic crime, which considers how consumers are affected by fraud and scams.
Rocio Concha, Which? director of policy and advocacy, said: “The case for including fraud enabled via online advertising in the Online Safety Bill is overwhelming, with industry, regulators, consumer groups and MPs all agreeing that urgent action is needed to tackle online scams and that platforms must do more to banish fraudsters. The Government must not miss the opportunity to act now.”
Phil Brown, director of policy at B&CE, provider of the People’s Pension, said: “It’s vital that the law is changed sooner rather than later, so that the £2.5 trillion of UK pension savings are better protected from scammers.”