The Government must include scams in its Online Safety Bill or risk leaving millions of people with mental health problems vulnerable to fraudsters, the Money and Mental Health Policy Institute has warned.
According to research carried out by the charity, people with mental health problems are three times more likely to have fallen victim to an online scam compared to the wider population. Nationally, this would amount to 4.6 million people with mental health problems.
People with mental health problems are also twice as likely to feel under pressure to spend whenever they go online, with personalised notifications and adverts driving them to spend more than they can afford. Easy access to online credit was shown to exacerbate the issue, with many people with mental health problems admitting that online lenders did not provide them with the support and information needed to make informed choices about taking out credit.
The Money and Mental Health Policy Institute, set up by Martin Lewis, said the current government plans to tackle online harms with its Online Safety Bill do not go far enough, after the government explicitly ruled out giving Ofcom powers to tackle online scams and other financial harms. It has urged the government to rethink its plans and provide Ofcom with new powers to force online platforms such as Facebook and Twitter to take stronger action on user-generated scams.
Polling showed that consumer appetite for greater protection was high, with six in ten UK adults (59%) wanting the government to take further action to protect people from financial problems when they go online.
Martin Lewis, founder and chair of the Money and Mental Health Policy Institute said scams impact people’s mental wellbeing in addition to their finances.
Lewis commented: “I simply don’t understand how an Online Safety Bill can simply exclude the epidemic of scams the UK faces. Scams don’t just steal people’s money, it often takes their self-respect and mental health too.
“The government has promised to set world-beating standards for online safety, but as it stands the Online Safety Bill will utterly fail to protect people from the growing threat posed by online scammers, especially to vulnerable people.”
Lewis said current consumer protections and fraud investigations remain “hopelessly inadequate” and out of date, leaving vulnerable people exposed to increasingly sophisticated online criminals.
He added: “The Online Safety Bill represents a golden opportunity for the government to put this right, by putting proper safeguards in place against scams, but unthinkably it is planning to pass up the chance to put things right. We can’t continue to leave big tech, much of which comes from the original Wild West, to police itself.
“We are urging the government to rethink this plan. Failing to include scams in the Bill will not only make a mockery of its promise to create world-leading online protections, it will also leave vulnerable people defenceless against crime.”
Debbie Barton, financial crime prevention expert at Quilter, said the charity’s findings should serve as a “wake up call” to the government to act now.
Barton said: “There is clearly a vicious cycle occurring, in which people with mental health problems are more likely to succumb to an online scam, which in turn will damage their mental health even further. The Government must act now by including scams within scope of the Online Safety Bill, a measure supported by many financial services firms as well as numerous consumer groups.
“At the moment we are in the absurd situation where there is no legally enforceable way of obliging search engines and social media platforms to remove ads for financial scams. As a result, the Financial Conduct Authority is spending considerable sums of money to post its own adverts warning consumers of the risk of scams. Something must be done to stop this from happening, and the Bill is the ideal opportunity to do just that.”
Industry body PIMFA, which itself has campaigned for the Online Safety Bill to go further to protect consumers from online scams, echoed the sentiment.
Liz Field, chief executive of PIMFA, added: “Online fraudsters scam people out of their life savings. The impact of such scams is devastating on the mental health of victims.
“The Online Safety Bill is a clear opportunity to put in place a legal framework that would help improve consumer protections against what are increasingly convincing online scams. Such a framework has significant support from across the financial services industry, consumer rights groups like Which? mental health charities like the Money and Mental Health Institute and the FSCS.
“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.”
