Friday 23 July 2021 11:57 am

MPs warn of ‘huge financial losses’ as scam ads left out of online safety laws

A string of cross-party MPs have blasted the government’s failure to include paid-for adverts in its upcoming online safety laws, warning of “huge financial losses” to the public.

In a joint letter to the prime minister, the Treasury Committee and the Work and Pensions Committee said fraudulent online ads were doing immense harm and urged him to include them in the online safety bill.

The bill, which was confirmed in the Queen’s Speech earlier this year, has been amended to include a crackdown on user-generated fraud online but not on the same fraud committed through a paid-for advert.

The letter comes after Boris Johnson told the Liaison Committee this month he would look again at the online harms bill if it was “in some way inadequate” at tackling online fraud.

“It is very disappointing that the government has not yet chosen to include fraudulent advertising in the Online Safety Bill,” said Mel Stride, chair of the Treasury Committee.

“As a committee we are calling on the government to do so in order to address online advertising scams, and to prevent further individuals being offered fraudulent financial products. Without decisive action, innocent consumers will continue to be defrauded on a large scale.”

The plea follows similar campaigns by organisations and high-profile figures including the Financial Conduct Authority (FCA) and the governor of the Bank of England.

Earlier this week a coalition of consumer groups, charities and industry bodies, including Innovate Finance, the Investment Association and The City UK, slammed the government’s approach as “complex and muddled”.

Although an EU exemption for online financial promotions from UK rules ended on 31 December, the FCA has warned there are limits to what it can do to tackle online harm, and that leaving legislation unchanged will continue to result in significant consumer harm.

The government has said the issue will be addressed as part of a separate review of advertising rules underway at the Department for Digital, Culture, Media and Sport.

But the committee took aim at the lack of progress in this review, which began with a call for evidence two years ago, and urged the government to address the matter in upcoming online harms laws.