Wealth management professional trade body PIMFA and the Financial Services Compensation Scheme have joined calls for economic harm to be included in the government’s upcoming Online Safety Bill.
Other organisations to join the call from the Stephen Timms MP, chair of the Work and Pensions Select Committee, include consumer rights group Which? and bank and finance trade body UK Finance.
According to the National Fraud Intelligence Bureau, the Coronavirus pandemic has created “a digital adventure playground” for organised crime, with reported online fraud up 50% since last year.
The FSCS said at least one fake investment website is reported every day. The compensation body said they have evidence of fraudsters also impersonating them and using the FSCS logo to scam consumers.
Action Fraud data shows that there have been 89,153 reports of fraud at an estimated cost of £406.5m in the first two months of 2021. The data includes 4,450 reports of investment fraud valued at £109.6m.
Speaking at PIMFA’s virtual annual conference, Mr Timms said: “At the moment online platforms are making money from scam adverts and fake websites and they are making money from the Scam Smart adverts from the Financial Conduct Authority as well. I’ve called on the Prime Minister in the House of Commons to ensure that the planned bill does tackle online financial harms. He recognised the problem, he said it was a growing problem and he said we will look at what we can do.
“It does seem to me this imminently forthcoming bill must tackle this problem. We can’t leave this for some possible future legislation.”
PIMFA, UK Finance, Which? the charity Money and Mental Health, and the Carnegie Trust UK are among a growing group of organisations from within the financial services industry, charities, consumers groups, and regulators who believe the Online Safety Bill is an opportunity to prevent the future growth of online scams.
Others that have called for economic harm to be added to Online Safety Bill include Financial Planning firm Quilter, and the Investment Association.
Liz Field, chief executive of PIMFA, said: “It is vital that people are protected from all forms of online exploitation. It is clear the Online Safety Bill offers the opportunity to create a legal framework to prevent people becoming victims of financial harm and that this has significant support from across the financial services industry.
“The internet has inadvertently facilitated fraudsters for many years but a large number of them could be prevented from making victims of consumers with greater cooperation from Domain Name Registration Services, Internet Service Providers and online platforms such as social media and search engines. I hope the government listens to our collective concerns and acts upon them.”
