MSE News

Martin Lewis and MSE among coalition of organisations renewing calls for Government action to tackle online fraud and the Money and Mental Health Policy Institute, which were both founded by Martin Lewis, are among 13 organisations today renewing calls for the Government to do more to tackle online fraud after it failed to commit to cracking down on scam financial ads in its new draft Online Safety Bill.

Concerns were initially raised by the coalition - which includes consumer group Which?, charity Age UK, and banking trade body UK Finance - in May, when they wrote a joint letter to home secretary Priti Patel and culture secretary Oliver Dowden. It called for scams to be covered by the new Bill and for online platforms to be given a legal responsibility to protect users from fake and fraudulent content on their sites that lead to scams.

However, despite repeated calls, the Government has not included paid-for online scam ads in the draft Bill, which has prompted the coalition to urge ministers to reconsider their current plans ahead of the Bill being presented for pre-legislative scrutiny.

According to Action Fraud figures, £1.7 billion was lost to scams in the past year, while estimates for the year to June 2020 reveal that 85% of all fraud was cyber-enabled. The coalition of organisations argue that consumers need to be better protected against the devastating financial and emotional harm caused by cyber crime.

See our 30+ Ways to Stop Scams guide for help on what to look out for, how to protect yourself, and what to do if you're a victim of a scam. For one-on-one help and advice, contact Citizens Advice Scams Action through its website, or call its online scams helpline on 0300 330 3003.

'The Government's current approach to tackling online fraud is flawed'

In its latest response to the Government, the coalition states there is still a long way to go in protecting consumers against online scam ads.

The joint statement reads: "As a coalition of consumer groups, charities and industry bodies, our united view is that the Government’s current approach to tackling online fraud is flawed. It will likely lead to complex and muddled regulations and far worse consumer outcomes than an Online Safety Bill with a comprehensive approach to online fraud.

“While we welcome the recent inclusion in the Bill of fraud carried out through user generated content and fake profiles on social media websites, there is a long way to go. Failing to include online advertising in the Bill leaves too much room for criminals to exploit online systems.

“This view is backed by the Financial Conduct Authority, Bank of England, City of London Police, Work and Pensions Committee, and Treasury Committee, who have all commented that the scope of the Online Safety Bill should be expanded to include fraud carried out via online advertising.

“We do agree with the Government that the impact of these frauds is often devastating, not just financially but also emotionally. That’s why we urge ministers to reconsider their current plan, and make sure the Bill protects as many consumers as possible from the full extent of the devastation caused by scams.”

The full list of the 13 organisations that have signed the statement

Here's a full list of the 13 organisations that have signed today's response to the Government: 

  • Age UK
  • The Association of British Insurers
  • Carnegie UK Trust
  • Innovate Finance
  • The Investment Association
  • Money and Mental Health Policy Institute
  • MoneySavingExpert
  • Personal Investment Management & Financial Advice Association (PIMFA)
  • B&CE Ltd, provider of the People’s Pension
  • TheCityUK
  • UK Finance
  • Victim Support
  • Which?

May's letter from the coalition had received the support of 17 organisations. The City of London Corporation and City of London Corporation Police Authority Board, which both signed the original letter, told us they missed the deadline to sign this latest statement but "wholeheartedly support calls for the Government to do more to tackle online fraud".

It is unclear why The Association for Financial Markets in Europe (AFME) and City of London Police did not sign the statement.

What does the Government say?

The Government's statement in response to the initial coalition call for action, which was signed by home secretary Priti Patel and culture secretary Oliver Dowden, said: "The Government has extended the scope of the Online Safety Bill to include fraudulent user-generated content. This has been reflected in the draft Bill that was published on 12 May.

"Companies that fall within scope of the new regulatory framework will need to take action to tackle fraud where it is facilitated through user-generated content. Companies providing search services will need to take action to tackle fraud facilitated through search results. The statistics clearly underline just how prevalent these crimes are, but it is absolutely critical to remember that behind the numbers are real victims, individuals and businesses, who have often had their lives turned upside down.

"We recognise the huge levels of harm that fraud can cause, not just in terms of significant financial losses, but also the devastating emotional impact they can have too. So we are absolutely committed to stopping the perpetrators of these despicable scams in their tracks. This new regulation will have a strong impact on some of the highest harm frauds, including romance frauds, purchase scams and user-generated investment and pension scams."

The Government added in its letter that it is considering tougher regulation on online advertising in a bid to clamp down on scams not covered by the new Bill. It will consult on this issue later this year as part of its 'Online Advertising Programme', led by the Department for Digital, Culture, Media and Sport. It adds that it is also working on a 'Fraud Action Plan', involving law enforcement and industry and consumer groups, to drive down fraud in general. 

In response to the coalition's latest call, a Government spokesperson added: "We have brought user-generated fraud into the scope of our new online laws to increase people's protection from the devastating impact of scams. The move is just one part of our plan to tackle fraud in all its forms."

Yvonne Fovargue MP, chair of the All-Party Parliamentary Group on Consumer Protection, said: "It is good to hear that the Government is considering halving the waiting time before a complainant can pass their case to the ombudsman. Eight weeks is simply too long a time to wait, especially in the digital age.

"The introduction of a ‘fit and proper‘ test for ombudsmen is also welcome, if long overdue. Both of these were recommendations in the report of the APPG on Consumer Protection, which I chaired, in January 2019.

"It would be even better if BEIS were now to consider some of the other recommendations we made then, including placing all ombudsmen schemes on a statutory footing, with enforceable powers covering all firms in their sectors. It would also be helpful and less confusing for consumers if we had a single portal for all complaints to ombudsmen, regardless of the nature of the complaint."


MSE weekly email

FREE weekly MoneySaving email

For all the latest deals, guides and loopholes simply sign up today – it's spam-free!