Social media companies and search engines face fines over scam adverts

scam adverts

Social media companies and search engines will be forced to remove scams from their websites or face fines under plans being considered by ministers.

Boris Johnson will use the Queen’s Speech this week to confirm plans for an Online Safety Bill, regulating the internet for the first time.

The legislation will make tech companies legally responsible for the online safety of their users. Ofcom will become the regulator of the sector and will be able to impose fines of £18 million, or 10 per cent of a company’s global turnover, if they fail to show a duty of care to users.

Campaigners including Martin Lewis, founder of the website MoneySavingExpert, have given warning that the legislation will be a failure if it does not protect people from scams.

Ministers are understood to be receptive to the concerns and the bill could be changed to cover scams during pre-legislative scrutiny by MPs.

Fraud costs the UK economy about £190 billion every year. Elderly people are particularly vulnerable to online scams encouraging them to cash in their pensions early. An estimated £10 billion in savings has been lost to pension scams since 2015, affecting 40,000 people.

Earlier this year a cross-party group of MPs warned the government of an “online free-for-all” that had resulted in tens of thousands of pensioners being defrauded of their life savings.

The work and pensions committee said that it was “immoral” that tech companies such as Google were profiting from adverts posted online by scammers.

Google has about a 90 per cent share of the UK market in keyword search advertisements. Not only do fraudsters pay Google to advertise their scams but financial regulators also pay Google to host warnings about the scams.

“It should not require legislative solutions to deter global firms from benefiting from the proceeds of crime but unfortunately legislation is clearly needed,” the committee said. “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.”

Anabel Hoult, chief executive of Which?, said: “The biggest online platforms have some of the most sophisticated technology in the world, yet they are failing to use it to protect scam victims who are suffering devastating financial and emotional harm due to the flood of fake and fraudulent content posted online by criminals.

“The time for self-regulation is over, as clearly it has not worked. The case for including scams in the Online Safety Bill is overwhelming and the government must take the opportunity to act now. Online platforms must be given a legal responsibility to prevent, identify and remove fake and fraudulent content on their sites so that their users are better protected.”

Lewis, who is also founder of the Money and Mental Health Policy Institute, said: “It beggars belief that the government’s Online Safety Bill could ignore the epidemic of scams that the UK faces — but that’s the plan.

“Scams don’t just steal people’s money, they can take their self-respect too, and those with mental health problems are three times more likely to be affected. The policing of scams is critically underfunded, leaving criminals to get away with these frauds with impunity. The government has a chance to at least deny them the ‘oxygen of publicity’ by making big tech responsible for the scammers’ adverts it is paid to publish.

“I plead on bended knee for the government to take that opportunity by putting scams in the Online Safety Bill. Failing to do so will betray its promise to create world-leading online protection and will leave vulnerable people defenceless against online crime in the midst of a global pandemic.”

The National Cyber Security Centre (NCSC) has taken down more scams in the past year than in the previous three combined. There was an increase in phishing attacks using NHS branding, with the Covid-19 vaccine rollout used as a lure to harvest people’s personal information via email and text messages.

Officials took down more than 286,000 fraudulent enterprises. Emails and digital adverts entice people to visit hoax websites about “get rich quick” schemes. They are then encouraged to click a link to invest but the money is sent to cybercriminals.

Ian Levy, the NCSC’s technical director, said criminals falsely claimed to have the endorsement of celebrities such as Martin Lewis, the personal finance expert.

Overall 700,500 campaigns were taken down. HM Revenue & Customs was the most copied brand used by fraudsters, followed by the website and TV Licensing. The NCSC’s annual two-day CyberUK event starts tomorrow.