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The UK government is making changes to its Online Safety Bill to force social media companies and search engines to prevent fraudsters using their platforms to conduct scams.
The government said it will add a duty to the bill forcing social media platforms and search engines to prevent paid-for fraudulent adverts appearing on their services.
“The change will improve protections for internet users from the potentially devastating impact of fake ads, including where criminals impersonate celebrities or companies to steal people’s personal data, peddle dodgy financial investments or break into bank accounts,” said the government.
Culture secretary Nadine Dorries added: “These changes to the upcoming Online Safety Bill will help stop fraudsters conning people out of their hard-earned cash using fake online adverts. As technology revolutionises more and more of our lives, the law must keep up.”
Banks have been calling for the government to force tech companies to take some responsibility for scams such as authorised push payment (APP) fraud, also known as bank transfer fraud, which sees criminals use fake websites and emails to trick consumers into authorising payments to them.
Banks felt they were overburdened with responsibility for fraud such as APP because they are mandated to repay customers’ losses.
In January last year, Anne Boden, CEO of digital challenger Starling Bank, called for cooperation between different sectors to clamp down on APP fraud.
In a blog post, Boden said other sectors must shoulder some responsibility for APP scams, particularly social media platforms. “Banks invest billions of pounds into tackling economic crime, but we cannot stop it on our own,” she wrote.
“Very often, [social media] accounts are used for advertising for ‘money mules’ for the purposes of money laundering, selling stolen identity and credit card data, phishing, bogus investment scams and impersonation fraud.”
Read more about authorised push payment fraud
- All banks must be transparent about the proportion of victims of APP fraud they refund, says consumer rights organisation Which?.
- The financial services ombudsman is siding with customers in over 75% of complaints against banks that refuse to repay losses to authorised push payment fraud.
- Criminals tricking people into making payments through channels such as fake emails and websites have stolen more money than payment card fraudsters.
Boden said banks “seem to have become the underwriter of all kinds of fraud that are not really financial fraud at all”.
Following the government’s latest announcement, Boden said: “We welcome this move, which we campaigned hard for. It cannot be right that social media and tech platforms take paid advertising from scammers who are going after the savings of our customers and those of other banks.”
Starling pulled all paid advertising from Meta Platforms, Facebook and Instagram in protest at their failure to remove ads placed by fraudsters.
Paul Davis, director of fraud prevention at TSB, also welcomed the government’s announcement, saying: “We have long campaigned for the government’s intervention to better protect people online and finally make social media companies take responsibility for removing fraudulent adverts.
“Vast numbers of people fall victim to these scams on social media platforms every day – so it’s vital that these rules are well enforced.”
MoneySavingExpert.com founder Martin Lewis said: “I am thankful the government has listened to me and the huge number of other campaigners – across banks, insurers, consumer groups, charities, police and regulators – who have been desperate to ensure scam adverts are covered by the Online Safety Bill.”
Lewis, who also founded the Money and Mental Health Policy Institute, added: “We are amidst an epidemic of scam adverts. Scams don’t just destroy people’s finances – they hit their self-esteem, mental health and even leave some considering taking their own lives.”
Read more on IT for financial services
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