MPs have called on the government to legislate against fraudulent online adverts in a report published today (2 February).
It has been produced by the Treasury select committee and looks at the changing nature of economic crime.
The committee calls on the government to seriously consider whether online giants should reimburse those who fall victim to scams on their platforms.
The report was unanimously agreed by the cross-party committee of MPs.
Mel Stride MP and Treasury select committee chair says: “For too long, pernicious scammers have acted with impunity, ripping off innocent consumers with fraudulent online adverts, impersonation scams and dodgy crypto investments.
“Unfortunately, fraud has soared during the pandemic, and as MPs we’ve heard heart-breaking stories of individuals who have fallen victim to these criminals and lost large sums of money.”
Content of the report
- The growth in economic crime, and the government’s response
- Online economic crime
- Authorised push payment fraud
- Anti-money laundering
- Cryptoassets and economic crime
- Companies and economic crime
The committee also suggests that the government legislates to make reimbursement for victims of “authorised push payment fraud” mandatory.
It previously made this call in 2019.
The report also calls for law enforcement to be appropriately resourced to tackle the scale of the problem.
It urges the government to consider whether a single law enforcement agency with a clear responsibility to fight economic crime would be more effective.
The committee also recommends proper regulation to be introduced. This is to protect consumers from fraud and money laundering in the cryptoasset industry.
Moreover, the it advocated for higher company formation fees and Companies House reform.
This is to prevent fraudsters from hiding their identities behind UK businesses to launder money and conduct crime.
Stride adds: “While the government have made some progress in this area, we’re today calling on them to push harder and act faster on the growing fraud epidemic.
“Some of our recommendations, such as legislating against online scam adverts, can be implemented quickly.
“Others, including crypto regulation and Companies House reform, will require a longer-term approach.
“Taken together, our proposals give the UK a fighting chance to get back on the front foot and stop these scammers in their tracks.”
The committee reiterated its call for the government to address fraud via online advertising in the Online Safety Bill.
“The government should consider whether online platforms and social media companies should be required to do Know Your Customer checks on their advertisers, to make it more difficult for fraudsters to promote themselves,” the report states.
The committee chair will discuss the report’s conclusions and recommendations on Wednesday 2 February.
Angela Eagle MP and representatives from Which? and RUSI will also participate to the discussion.
Action Fraud told Mortgage Strategy sister magazine Money Marketing that 62% of the reports of fraud and cyber-crime it received between December 2020 and December 2021 were cyber-enabled.
