‘Online free-for-all’ of pension scam adverts must end, say MPS
Global technology firms such as Google must be held to account for hosting pension scam adverts, MPS have urged.
An “online free-for-all” amid a lack of regulation has allowed scammers to advertise while tech giants “line their pockets”, the Work and Pensions Committee said, calling for legislation.
The pension freedoms introduced in 2015 for over55s have put people at risk of a much wider range of fraud, and the government and regulators have been left playing catch-up, the committee said.
More than £30 million lost to pension scammers was reported to Action Fraud between 2017 and August 2020, but the committee said this substantially underestimates the true total.
It said the reputation of Action Fraud, the UK’S national reporting centre for fraud and cybercrime, has been left “in tatters” by a failure to manage the expectations of victims and a lack of action on cases.
The Pension Scams Industry Group estimates a total of £10 billion has been lost by 40,000 people to pension scams since 2015. The situation is likely to be getting worse, with the coronavirus pandemic providing scammers with new opportunities, it added.
The committee said it had heard throughout its inquiry that pension scammers have moved online, with regulators appearing powerless to hold search engines and social media to account for hosting scam adverts.
It said tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings – a practice the committee described as “immoral”.
It called for the Government to rethink its decision to exclude financial harms from the Online Safety Bill and use it to legislate against online investment fraud.
Google said it has recently updated policies aimed at stopping fraudulent behaviour, has added more layers to its advertiser verification processes, and has also been working closely with watchdog the Financial Conduct Authority.
A Google spokeswoman said: “Protecting consumers and credible businesses operating in the financial sector is a priority for us.
“We take dishonest business practices and misleading ads very seriously.”