Include ‘fraud’ in Online Safety Bill
11 February 2021
PIMFA has urged the Government to include economic harm in its forthcoming Online Safety Bill, as attempts to defraud savers increases amid the Covid-19 crisis.
According to the latest Action Fraud figures, there were 356,649 reported cases of fraud and an estimated £2.1 billion lost to fraudsters in 2020. Of that amount, investment frauds that encourage consumers to buy unsuitable or non-existent investment products, pension liberation scams, boiler room scams and Ponzi or pyramid schemes accounted for less than 10% of all reported crimes but made up some 25% of all financial losses at £501 million.
This is in addition to separate Action Fraud figures which showed £78 million was lost to cloned website fraud, where fraudsters copy an investment firm’s website in order to steal from unsuspecting consumers.
With only around 20% of fraud incidents believed to be reported, PIMFA says the true number of victims and the amount of money lost is likely to be far higher than current figures suggest.
The trade association believes that such is the extent of fraud, the only solution is to enshrine in law additional consumer protections that would tackle the growing threat from online fraudsters.
Liz Field, chief executive, PIMFA, said: “The impact of fraud on the financial and mental wellbeing of individuals and their families can be devastating and the figures show that it is becoming an ever-present danger in our daily lives. A large number of victims of fraud lose their entire life savings. We already know the Covid-19 pandemic is causing financial hardship for many people and the danger is that if we don’t act now, as an industry together with the Government and Regulators, online fraud will only get worse.
“Most online scams could be prevented with the cooperation of Domain Name Registration Services, Internet Service Providers and online platforms such as social media and search engines but we need a legal framework and genuine enforcement procedures if we are to stop online fraud becoming pervasive. To do that we must include financial harms within the Online Safety Bill.”
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