MPs warn online safety bill risks weakening fraud protection

The Joint Committee on the Draft Online Safety Bill called for online protection to be beefed up across the board – including specific recommendations to tackle online fraud. Chair, Damian Collins, said the legislation must ‘call time on the Wild West online’.

Among the recommendations were for paid adverts to be covered by the bill, to stop fraudsters from using the adverts to attract their victims.

Full details of the recommendations are published here: No longer the land of the lawless: Joint Committee reports – Committees – UK Parliament

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “The Online Safety Bill needs to protect us from online fraud, so the fact that the draft bill could end up actually weakening existing protections is alarming. These changes seem an eminently sensible way to protect us from a risk that does so much financial and emotional damage to so many people.

There are a number of problems with the bill as it stands, not least the fact that paid adverts aren’t included, and we know this is how enormous numbers of fraudsters trap their victims.

In addition, it’s not designated as ‘priority illegal content’, and isn’t specifically mentioned in the way other risks are. It means providers only have a duty to remove fraud when it’s reported by users. And there’s a risk that it’s only likely to be reported by users when they have fallen victim.

The Competition and Markets Authority warned that at the moment legislation means that providers have to take proactive steps to minimise the risk from content designed to damage people’s finances, so the new legislation could actually undermine existing rules, and weaken protections.

The committee called for it to be designated as a priority, so providers would have to control the risk of content appearing on the site. They also want fraud to be specifically mentioned alongside other risks, so the bill itself rather than secondary legislation would require platforms to proactively stop fraud from appearing.”

Evidence heard by the committee included:

  • Victims of fraud lost £2.3bn over the past year alone., and 85% of scams rely on the internet.
  • Insurance companies warned that fraudsters can make copies of providers’ websites and pay for them to appear at the top of search results.
  • Martin Lewis, founder of Money Saving Expert and the Money and Mental Health Policy Institute, highlighted investment scams, which promote fake investment opportunities promising high returns.
  • The committee also received details of romance scams, where fraudsters create fake accounts on dating sites and develop relationships with victims. £21.2 million was lost to romance scams in 2020 – up 17% in a year – affecting almost 9,000 people.
  • The Office of the City Remembrancer, City of London Corporation, said since 2019, online shopping and auction fraud was up 43%, romance scams 15% and investment fraud 16%.