MPs urge govt to tackle paid-for advertising fraud to end 'land of the lawless'

The Draft Online Safety Bill Joint Committee has recommended that paid-for advertising should be covered by the bill, in an effort to combat online scams and fraud.

The committee’s report warned that too many people were currently falling foul of online scams, reporting that 85 per cent of financial scams rely on the internet in some way.

Under the committee’s recommendations, providers would be required to have systems and processes in place to proactively identify fraudulent content and minimise its impact on their platforms, including paid-for adverts.

Commenting on the report, Draft Online Safety Bill Joint Committee chair, MP Damian Collins, said: “The committee were unanimous in their conclusion that we need to call time on the Wild West online. What’s illegal offline should be regulated online.

“For too long, big tech has gotten away with being the land of the lawless. A lack of regulation online has left too many people vulnerable to abuse, fraud, violence and in some cases even loss of life.

“The committee has set out recommendations to bring more offences clearly within the scope of the Online Safety Bill, give Ofcom the power in law to set minimum safety standards for the services they will regulate, and to take enforcement action against companies if they don’t comply.

“The era of self-regulation for big tech has come to an end. The companies are clearly responsible for services they have designed and profit from, and need to be held to account for the decisions they make.”

The recommendations were based on a range of testimony from industry figures, including Martin Lewis, who also previously wrote to the government, alongside a number of household names, to call for urgent action to tackle online scams.

This letter was the latest in a string of calls for the bill to be extended to include paid-for advertising, with the Financial Conduct Authority (FCA) also previously calling for legislative change in light of the limits of its powers in this area, while Work and Pensions Committee (WPC) chair, Stephen Timms, warned that regulators are "powerless" against online paid advert scams.

Indeed, a previous WPC inquiry made similar recommendations for the inclusion of paid-for advertising in the bill, although the government later rejected this, confirming that it would only be addressing user-generated fraud.

Quilter financial crime prevention expert, Debbie Barton, also pointed out that it is not often there is such strong support for one particular policy change from many areas of society.

“From consumer groups, to the regulator and the financial services industry, this is the one issue on which everyone is united," she said. "And that is for the government to tackle the scourge of online scams, committed using fake adverts and cloned websites online, by amending the Online Safety Bill."

Barton continued: “This is exactly what the Draft Online Safety Bill Committee has recommended, and is exactly what should now be delivered from the government.

“For far too long, scammers have been allowed to operate with impunity in an online world in which consumers have few protections.

“The Online Safety Bill ensures technology companies face a new legal duty to tackle harm caused as a result of content on their platforms.

“We hope that with the committee’s recommendation to also include adverts in scope of the bill, the calls for change become overwhelming and the government decides to take action.”

This was echoed by Hargreaves Lansdown senior personal finance analyst, Sarah Coles, who highlighted the committees recommendations as "an eminently sensible way to protect us from a risk that does so much financial and emotional damage to so many people".

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