Written evidence submitted by The Work and Pensions Committee (OSB0020)


Dear Damian,

I am writing to ask your Committee to consider the recommendations made by the Work and Pensions Committee about the Online Safety Bill.

The Work and Pensions Committee considered the issue of online financial harms in its March 2021 report Protecting pension savers—five years on from the pension freedoms: Pension scams and found that:

The move online by pension scammers has been a recurring theme of our inquiry. Regulators appear powerless to hold online firms to account for hosting scam advertisements in the same way they would be able to for traditional media. Scammers using paid-for online advertisements appear to be particularly hard to tackle without the co-operation of the hosting firm. It is immoral that tech firms such as Google are accepting payment to advertise scams, and then further payment from regulators to warn about the scam. It should not require legislative solutions to deter global firms from benefitting from the proceeds of crime, but unfortunately legislation is clearly needed.

The Committee recommended that paid-for advertising on online platforms should be covered by the regulatory framework for financial promotions and that the forthcoming Online Safety Bill should legislate against online investment fraud.

Since that report was published the Government has proposed legislating against certain types of user-generated fraud, but not against the same fraud committed through a paid-for advertisement. Unusually, public bodies and office holders have been outspoken about the need to broaden the Bill to include paid-for advertising if it is to tackle online fraud. The Financial Conduct Authority told our Committee that:

We have consistently been of the view that financial harms should be included in the Online Safety Bill to ensure that online platform operators take responsibility for the material which they disseminate which could cause consumers financial harm.

We welcomed the Government’s confirmation that certain types of user-generated online fraud will be brought within scope of the Bill. We very much hope, however, that it can be amended to cover paid-for advertising as well as it is online advertising that is the major source of the problems leading to very significant consumer harms. The outcome we want to see is that platforms have an obligation to identify and remove fraudulent content –regardless of its format.

We do not agree with the arguments made by some platforms that such a measure would undermine competitiveness of the UK technology sector as we do not consider a business model which acts as a gateway to large scale fraud against consumers constitutes a sustainable business model. We recognise that ultimately this is a matter for Government and Parliament to decide on.The Governor of the Bank of England, Andrew Bailey, told the Treasury Select Committee that:The lesson here is that the online world is not subject to the same legal duties as the more traditional media. There is consequently no adequate shared responsibility with online service providers and consumers are at much greater risk. This could be tackled through the Online Harms Legislation, but the experience so far, and thus the lesson, is that there is strong resistance in other parts of the official sector to extending the legislation to financial services. This is a serious problem.

The City of London Police wrote to our Committee in May 2021, saying:

While the current scope of the Online Safety Bill includes user-generated content it excludes advertisements and cloned websites. This leaves a gap in the protection provided for the public. Ideally, there would be wider reaching legislation requiring a duty to protect and/or corporate criminal liability for failure to prevent across all online and telecommunications enablers.

The Financial Services Compensation Scheme have also publicly called for the scope of the bill to be broadened.

We welcome the Prime Minister’s comments to the Liaison Committee that “one of the key objectives of the Online Safety Bill is to tackle online fraud” and his commitment to look at the Bill if it was “in some way inadequate”. Legislating against fraud committed through paid-for advertisement has strong cross-party support and not doing so will result in potentially large financial losses to the public.

With best wishes,


Rt Hon Stephen Timms MP

Chair, Work and Pensions Committee


9 September 2021