Credit, Collections & Insolvency News
Wealth trade association, PIMFA has called for the Financial Conduct Authority (FCA) to be given the power to direct Ofcom to act over potentially fraudulent online adverts or user-generated content that appear on search engine and social media platforms in evidence to MPs scrutinising the Online Safety Bill today.
Tim Fassam, Director of Government Relations and Policy at PIMFA, called for an amendment to the Bill that would see partner regulators such as the FCA provide strategic support to Ofcom to prevent harm being introduced to financial services consumers.
While the Bill deals very specifically with fraud and breaches of the Financial Services and Markets Act (FSMA) it is unclear how Ofcom will ensure it has the expertise needed to identify breaches. Mr Fassam pointed to the case of London Capital & Finance where the regulated firm was able to introduce harm into the market through the sale of unregulated, speculative mini-bonds aided specifically by advertising, offering significant returns in a low-interest rate economy. If the FCA were able to swiftly prevent adverts of this nature through Ofcom it could significantly reduce the risk of potential harm to consumers.
Fassam said PIMFA was also supporting a Which? amendment to the Bill to ensure that search engines had the same duty of care as social media websites to eliminate fraudulent adverts on their platforms.
Fassam said “Scams and fraud are the most prevalent form of crime in the UK, and it is important UK laws are focused on where and how that crime is perpetuated. The pandemic led to UK society becoming increasingly isolated and naturally taking solace online. Since then we have seen a worrying rise in incidents of fraud, up 41% compared with pre-pandemic and 9% of all UK adults reporting being a victim of fraud. This represents a real financial loss of £2.6bn for the UK, while the emotional and physical toll it takes is estimated to be the equivalent of £9.3bn per year.”
“It is vital that UK laws are constructed to ensure that UK consumers are adequately protected online. In our view, this Bill represents significant progress in ensuring that this is the case. However, the Bill is not without its faults. We believe the amendments PIMFA, Which? and our coalition partners have called for – as when we called for fraud to be a priority harm within the Online Safety Bill in the first place – will ensure the Bill is more effective in preventing thousands of people suffering at the hands of fraudsters.”
