Online safety bill to clamp down on fraud

The Government has announced that internet laws, as part of the draft Online Safety Bill, will include measures to tackle user-generated fraud.

The proposed change will mean online companies will, for the first time, have to take responsibility for tackling fraudulent user-generated content, such as posts on social media, on their platforms. This includes romance scams and fake investment opportunities posted by users on Facebook groups or sent via Snapchat.

The draft Bill marks a milestone in the Government’s fight to make the internet safe. Despite the fact that we are now using the internet more than ever, over three-quarters of UK adults are concerned about going online, and fewer parents feel the benefits outweigh the risks of their children being online – falling from 65 per cent in 2015 to 50 per cent in 2019.

The draft Bill includes changes to put an end to harmful practices, while ushering in a new era of accountability and protections for democratic debate, including provisions to tackle prolific online scams such as romance fraud, which have seen people manipulated into sending money to fake identities on dating apps.

Home Secretary Priti Patel said “This new legislation will force tech companies to report online child abuse on their platforms, giving our law enforcement agencies the evidence they need to bring these offenders to justice.”

“Ruthless criminals who defraud millions of people and sick individuals who exploit the most vulnerable in our society cannot be allowed to operate unimpeded, and we are unapologetic in going after them.”

“It’s time for tech companies to be held to account and to protect the British people from harm. If they fail to do so, they will face penalties.”

The draft Bill will be scrutinised by a joint committee of MPs before a final version is formally introduced to Parliament.

Analysis by the National Fraud Intelligence Bureau found in 2019/20 there were 5,727 instances of romance fraud in the UK (up 18 per cent year on year). Losses totalled more than £60 million.

Romance fraud occurs when a victim is tricked into thinking that they are striking up a relationship with someone, often through an online dating website or app, when in fact this is a fraudster who will seek money or personal information.

Fraud via advertising, emails or cloned websites will not be in scope because the Bill focuses on harm committed through user-generated content.

The Government is working closely with industry, regulators and consumer groups to consider additional legislative and non-legislative solutions. The Home Office will publish a Fraud Action Plan after the 2021 spending review and the Department for Digital, Culture, Media and Sport will consult on online advertising, including the role it can play in enabling online fraud, later this year.

Responding to the news, Mike Haley, Chief Executive at Cifas said “The inclusion of user-generated fraud in the Online Safety Bill is a welcome step forward in protecting the UK public and the business community from one of the most prevalent online harms. However, more needs to be done to tackle other aspects of fraud perpetrated online.”

“The Bill places responsibility on platforms with regards to user-generated content, but excludes other types of online fraud. I look forward to the release of the Home Office Fraud Action Plan and how this will address fraud currently excluded from the Online Safety Bill, such as through advertising, emails and cloned websites.”

“Fraud in the UK has reached epidemic levels and recent research commissioned by Cifas and RUSI has highlighted the strong link between fraud and other high harm crimes such as people and drug trafficking, and terrorist financing. We need to act fast to disrupt criminal operations and ensure that online platforms are taking the appropriate steps to do so.”

“I would like to congratulate everyone who has worked tirelessly over the last two years to ensure that this important change was included in the Online Safety Bill. We at Cifas are keen to engage with any organisation looking to tackle other types of online fraud currently excluded from this Bill.”

David Postings, Chief Executive of UK Finance, said “We’re pleased that the upcoming Online Safety Bill will tackle some aspects of fraud, but it won’t protect people from all fraud that takes place online. As more of us have shifted online because of the pandemic, we’ve seen a spike in money mule activity, investment and purchase scams over the last year because criminals can target people directly in their homes across online platforms. Whilst the Bill includes fraud via user generated content on social media sites and dating apps, it won’t cover cloned websites and online adverts which fraudsters pay for. ”

“We encourage government to include all economic crime within the Bill when it is formally introduced. Not doing so leaves a large proportion of the public at high risk of being scammed online, because criminals are experts in adapting their tactics to exploit any loopholes.”

Vim Maru, Lloyds Banking Group’s Retail Bank Group Director “Fighting the financial fraud pandemic will require more effort to stop scams that start on social media and fake websites. While the Online Safety Bill will help keep people safer online, financial fraud remains the missing piece of the puzzle and we would urge this to be included as the Draft Bill is progressed.”

“We’re working behind the scenes 24/7, investing more than £100million in our defences to stop the majority of attempted fraud. The Bill needs to reflect the role of big tech to help stop scams from happening in the first place, otherwise fraudsters will continue ruining lives and disappearing with victims’ cash.”