Continued failure to act against online scams highlights Government’s ambivalence to major source of harm
6 July 2021
The Government must listen to its own financial regulator and legislate to ensure global tech firms can be held properly responsible for hosting pension scam adverts online.
- Read the Government Response
- Inquiry: Protecting pension savers – five years on from the pension freedoms: Pension scams
- Work and Pensions Committee
In its response to the Work and Pensions Committee report on pension scams, the Government rejects the Committee’s recommendation that the forthcoming Online Safety Bill should tackle fraud facilitated through paid-for advertising, such as adverts for pension products on search engines. There will instead be a consultation on online advertising regulation later in the year.
The Government’s stance is in direct contrast to that of the body responsible for regulating financial promotions. In a letter responding to the Committee’s report, also published today, the Financial Conduct Authority warns that online advertising is ‘the major source of problems leading to very significant consumer harms’ and backs calls for financial harms to be included in the legislation, which was brought forward in the Queen’s speech.
Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:
“Ministers claim to understand the devastating impact of illegal activity online, but by constantly failing to act against paid for adverts online they remain at odds with their own enforcement agency and totally ambivalent to what the FCA warns is a major source of harm.
The FCA sees the damage being done to consumers by online scams day in day out. It doesn’t think it has enough powers to protect people, yet still the Government cannot be cajoled into action. A vague promise to consult later this year is too little too late. Without backing words with action, the law will remain toothless and continue to allow scammers to advertise with impunity while tech giants line their pockets from the proceeds of crime.”
The Committee’s report, published in March, called on the Government to 'act quickly and decisively' to protect pension savers, more than five years on from the introduction of the pension freedoms, which put people at risk of a much wider range of scams and fraud.