Coalition of organisations urges government to use Online Safety Bill to protect people from an avalanche of online scams
7 May 2021
Money and Mental Health has joined with 16 other organisations championing consumers, and representing civil society and business, to warn that the UK risks failing in its ambition to be the safest place in the world to be online unless it uses new laws to protect people from an avalanche of online scams.
In a joint letter to the Home Secretary and Digital Secretary, the organisations have urged the government to include online scams in its proposed Online Safety Bill – which could be announced in next week’s Queen’s Speech – so that consumers are better protected against the devastating financial and emotional harm caused by these crimes.
The organisations that have signed the letter include Which?, , Carnegie UK Trust, UK Finance, the Personal Investment Management and Financial Advice Association (PIMFA), the City of London Corporation, City of London Police, The Investment Association, Association of British Insurers (ABI), MoneySavingExpert and Age UK.
From using social media to stay in touch with friends and family to using search engines to research potential investments at a time of record-low interest rates – the coronavirus crisis has meant people are spending more time online than ever before.
However, scams have escalated in the past 12 months, with Action Fraud figures showing that £1.7 billion was reportedly lost to scams in the last year. Many criminals have shifted their activity online. Action Fraud estimates that in the year to June 2020, 85% of all fraud was cyber-enabled.
The actual financial losses are likely to be much higher and do not capture the devastating emotional impact on victims. Research also shows that vulnerable people, including those experiencing mental health problems, are more at risk of falling victim to these crimes online.
In their letter, the organisations write:
“Online platforms play a pivotal role in enabling criminals to reach and defraud internet users through the hosting, promotion and targeting of fake and fraudulent content on their sites, including adverts that they make significant profits from. Yet platforms have very little legal responsibility for protecting their users, despite often being the best placed to tackle harmful content.
“While we recognise there are initiatives being progressed by the Government designed to tackle aspects of online fraud, there is a growing risk that current plans for future regulatory frameworks are not taking a comprehensive approach to the threats faced by consumers and do not reflect the extent or urgency of the problem.”
UK Finance figures show a 32 per cent increase in investment scam cases in 2020, which are often promoted through adverts on search engines and social media offering higher than average returns. One victim of such a scam was Maria Teresa Jackson, 63, a teacher. Ms Jackson was tricked by an advert she saw on a social media site, featuring a fake news story with fabricated quotes from celebrity adventurer Bear Grylls, who supposedly told how he had become a millionaire by trading in Bitcoin.
She clicked the button and put in her details and soon received a phone call from a “financial advisor” who showed her around a professional looking website, and was very knowledgeable about trading. Over time she was persuaded to transfer increasing amounts of money to the scammer. It later became clear that the Bitcoin did not exist. Scammers stole nearly £120,000 and First Direct, her bank, has so far refunded her half that amount.
She said: “I felt completely sick. I’m overall better now but often I get flashbacks of certain events and that upsets me a lot. I usually get them at night when I’m in bed and when that happens, it sets the tone for a bad night’s sleep.”
A wide-ranging consensus has emerged across industry, regulators and consumer groups on the urgent need for action to tackle scams and the critical role that online platforms must take in doing more to protect their users.
The coalition of groups is calling for online platforms to be given a legal responsibility to protect users from fake and fraudulent content on their sites that lead to scams. The government now has a perfect opportunity to deliver this in its proposed Online Safety Bill, which could be announced as part of next week’s Queen’s Speech on 11 May.
Martin Lewis, Founder of the Money and Mental Health Policy Institute and MoneySavingExpert.com, said:
“It beggars belief that the government’s Online Safety Bill could ignore the epidemic of scams that the UK faces – but that’s the plan. Scams don’t just steal people’s money, they can take their self-respect too and those with mental health problems are three times more likely to be affected. The policing of scams is critically underfunded, leaving criminals to get away with these frauds with impunity. The government has a chance to at least deny them the ‘oxygen of publicity’ by making big tech responsible for the scammers adverts it is paid to publish.
“I plead on bended knee for the government to take that opportunity, by putting scams in the Online Safety Bill. Failing to do so will betray its promise to create world-leading online protection and will leave vulnerable people defenceless against online crime in the midst of a global pandemic.”
Full list of 17 organisations that have signed the letter:
- Age UK
- The Association of British Insurers
- The Association for Financial Markets in Europe (AFME)
- Carnegie UK Trust
- City of London Corporation
- City of London Corporation Police Authority Board
- City of London Police
- Innovate Finance
- The Investment Association
- Money and Mental Health Policy Institute
- Personal Investment Management & Financial Advice Association
- B&CE Ltd, provider of the People’s Pension
- UK Finance
- Victim Support