The treasury committee is calling on government to “push harder and act faster” to tackle fraud by including it in the upcoming Online Safety Bill.
The select committee, which is made up of cross-party MPs and scrutinises the work and spend of HM Treasury, HM Revenue and Customs and associated public bodies, has today published its Economic Crime report, looking at the growing fraud epidemic in the UK.
Internet scams have thrived during the pandemic, with fraudsters taking advantage of increased time spent online and at home. In 2020, the National Cyber Security Centre (NCSC) reported a fifteen-fold increase in the number of scams it took down compared to 2019, from roughly 200,000 to 2.2 million.
Government is being urged to include fraud within the upcoming Online Safety Bill, which would encourage Big Tech platforms to be “proactive rather than reactive” around fraud ads on their platforms, says the treasury committee.
Fraudulent adverts regularly appear on popular social media sites and search engines, promoting false products or money-making schemes and often using celebrities and public figures without their consent.
The committee’s report urges the government to crack down on scam adverts through legislation and consider whether tech giants such as Google and Facebook should reimburse victims who have fallen for scams on their platforms. Julian Knight, chair of the digital, culture, media and sport (DCMS) select committee, also recently called for such retribution.
Another recommendation is that websites be required to do thorough checks on advertisers, and only allow promotions from financial services companies that are authorised by the Financial Conduct Authority (FCA).
Authorised Push Payment (APP) fraud is another type of online scam where individuals are asked to transfer money to a bank account under false pretences or impersonation. This can range from an invoice made to look like one from a tradesperson or a school, a payment request sent to an employee, or emotional manipulation via romance scams.
The report asks for reimbursement for such scams to be made mandatory, meaning payment service providers (PSPs) – such as banks – would have to compensate victims.
The creation of a single law enforcement agency would help fight economic crime, the committee says, adding that the number of agencies currently tackling fraud is “bewildering”. More stringent regulation should also be introduced to protect people from cryptocurrency fraud and money laundering, it advised.
Commenting on the report, Mel Stride, MP for Central Devon and chair of the treasury committee, says: “For too long, pernicious scammers have acted with impunity, ripping off innocent consumers with fraudulent online adverts, impersonation scams and dodgy crypto investments.
“Unfortunately, fraud has soared during the pandemic, and as MPs we’ve heard heart-breaking stories of individuals who have fallen victim to these criminals and lost large sums of money.
“While the government have made some progress in this area, we’re today calling on them to push harder and act faster on the growing fraud epidemic.”
Chris Philp, Minister for Tech and the Digital Economy, recently assured MPs that he had heard their demands around including scam advertising in the Online Safety Bill “very clearly”, and that he “very much hopes to address [fraud] when we update the bill”.
An updated bill is expected before the end of the current parliament session, which is spring.