Steps to protect consumers from financial harm have been brought within the remit of the Online Safety Bill, following a sustained campaign from the financial sector to get fraudulent advertising included in the new rules.
The latest measures will require online platforms to protect people from pre-paid scam and fraudulent adverts appearing on their sites.
The change will improve protections for internet users from the “potentially devastating” impact of financial scams which can completely destroy their finances and ability to trust, the government said in a statement.
Culture Secretary Nadine Dorries said: “We want to protect people from online scams and have heard the calls to strengthen our new internet safety laws. These changes to the upcoming Online Safety Bill will help stop fraudsters conning people out of their hard-earned cash using fake online adverts.”
The move was welcomed by the financial advice industry, which has been vocal in its calls for financial harm to be included in the new bill.
Liz Field, chief executive of PIMFA, said when the government’s initial white paper on the Online Safety Bill was published, the industry had been “dismayed” to discover that financial harm was not included.
Field said: “PIMFA, UK Finance, Which? The Money and Mental Health Policy Institute and many other organisations formed a campaign group to lobby the Government to include fraudulent online adverts and user-generated content, which cause untold financial and mental distress to thousands upon thousands of victims each year, within the scope of the Online Safety Bill.
“In May, the Government conceded our point about user-generated content and included such content within the scope of the Online Safety Bill. Today, it has once again accepted our argument, and that of the Financial Conduct Authority, Financial Services Compensation Scheme, Bank of England, and the Treasury Select Committee among a host of MPs and others, that paid-for online adverts be included within the scope of the Bill.
“Of course, we will wait to see the detail in the Bill. But we are delighted to see the Government has seen sense and is willing to act to save thousands of people from the threat of fraud, which is after all, the widest reported crime in the UK today.”
Debbie Barton, financial crime prevention expert at Quilter, commented: “We are thrilled that after years of campaigning by us and many others, we finally have confirmation from the government that they will act on impersonation scams through concrete legislation to protect consumers.
“For far too long, scammers have been allowed to operate with impunity in an online world in which consumers have few protections. It is far too easy for scammers to steal the identity of a well-known celebrity, or impersonate the brand of a well-known financial services firm, host a website with a domain located outside the UK, and use a cheap advert to reach potentially thousands of unsuspecting individuals.
“The government wanted to just include user-generated scams, and not paid-for adverts, but this wouldn’t have been enough. In fact, it would have encouraged scammers to just pay for an advert to avoid the new legislation. Now, the legislation will cover scams from all sources. In doing so, the Bill will ensure that technology companies face a new legal duty to tackle harm caused as a result of fraudulent content on their platforms.”
