Tech giants ‘profit’ from fraudulent online ads, warn MPs

Industry calls for tougher laws to police companies and regulators

TECH giants such as Google are “immorally” profiting from a multibillion-pound pension scam industry, MPs warned yesterday.

Internet firms are free to “line their pockets” from the proceeds of scammers in the absence of legislation to protect consumers online, a report from the work and pensions committee said.

The Government is facing pressure to legislate against online scams by reversing its decision to exclude financial abuse from the Online Harms Bill currently passing through Parliament.

It follows campaigning by industry figures and crossparty MPs calling for tech companies to play a bigger role in policing online scams, and to be held accountable when they fall short.

Now, MPs have accused tech companies of accepting payment to advertise scams on their platforms, before receiving further payments from regulators to publish scam warnings.

Labour MP Stephen Timms, chairman of the work and pensions committee, warned of an “online free-for-all” where scammers could “advertise with impunity” and tech giants “line their pockets from the proceeds”.

A Telegraph investigation last year found that Google was earning tens of millions of pounds a year allowing fraudulent or unregulated investments to be advertised on its search engine. At the time Google said consumer protection was a priority for the company. “The pension freedoms brought more choice for savers on how to use their pension pots, but the reforms have also opened up a whole new world of opportunity for scammers and fraudsters,” Mr Timms said.

A spokesman for Google said: “We take dishonest business practices and misleading ads very seriously and consider them to be a violation of our policies.

“Last year, we updated our financial services policies and removed 3.1 billion bad ads from our platforms, of which 123 million were ads related to financial services.”

MPs also called on the Financial Conduct Authority to “raise its game”.

Earlier this year it emerged the City watchdog opened just 10 investigations into investment scams between January and October 2020 despite receiving tens of thousands of tip-offs.

MPs also warned the reputation of Action Fraud, the UK’s national centre for fraud and cybercrime, had been left “in tatters” by its lack of action and a failure to manage victims’ expectations.

In February there were 48,000 instances of fraud reported to City of London Police, up from 31,000 in the same month last year.

The Pension Scams Industry Group estimates that £10 billion has been lost by 40,000 people to pension scams since 2015.

The Online Harms Bill will give Ofcom the power to fine internet firms up to 10 per cent of their sales for failing to stop content that is “harmful”. Scam pension adverts are currently excluded from the planned legislation.

An FCA spokesman told The Sunday Telegraph tackling scams remained a priority for the regulator and “considerable resources” had been dedicated to both “prevention and pursuit”.