UK MPs call for legislation against online fraudulent adverts
The UK Treasury Committee calls for additional Government action to combat fraud and scammers as it publishes its report on Economic Crime.
The report, which was unanimously agreed by the cross-party Committee of MPs, urges the Government to legislate against online fraudulent adverts and seriously consider whether online giants should reimburse those who fall victim to scams on their platforms.
The Committee also recommends that the Government urgently legislates to make reimbursement for victims of ‘authorised push payment fraud’ mandatory – repeating a call made by the previous Treasury Committee in 2019.
In a series of recommendations, the report calls for law enforcement to be appropriately resourced to tackle the scale of the problem, for the Government to consider whether a single law enforcement agency with a clear responsibility to fight economic crime would be more effective, and for proper regulation to be introduced to protect consumers from fraud and money laundering in the cryptoasset industry.
The Committee also advocates higher company formation fees and Companies House reform in order to prevent fraudsters from hiding their identities behind UK businesses to launder money and conduct crime, and pushes for the Government to set out the legislation it is current working on which could be included in an Economic Crime Bill.
There is currently no legal requirement for internet platforms and social media companies to do any Know Your Customer checks on their advertisers. This makes it easy for fraudsters to purchase advertising, and more difficult for social media companies and internet platforms to filter it out. This is in contrast to the financial services companies, which are required to do Know Your Customer checks when onboarding new customers.
In December 2021, techUK, the trade body for UK online companies, announced that Facebook (now known as Meta), Twitter and Microsoft had committed “to introduce a revised advertising onboarding process that requires UK regulated financial services to be authorised by FCA prior to serving financial services adverts to their sites”. Similar steps had already been taken by Google, TikTok and Amazon.
However, there is no set timeline for when these changes will come into force, and processes will vary from company to company.
Some major online platforms have yet to make similar commitments. The MPs wrote to Snap Inc (owner of Snapchat, an instant messaging app), asking what plans they had to comply with FCA advertising policy. In its reply, Snap Inc (which is not a member of techUK), did not disclose any plans to change its systems to ensure that advertisers of financial promotions are authorised by the FCA.
Nor did eBay provide any such statement when responding to a letter from the Committee.