Web giants ‘cashing in’ on pensions scam pain
The committee is calling for online investment and pensions fraud to be included in the forthcoming Online Safety Bill.
A report from the committee calls on the government to ‘act quickly and decisively’ to protect pension savers. It warns that commonly cited figures of the scale of pension scamming are likely to substantially underestimate the problem. It says the situation is likely to be getting worse rather than better, with the Covid-19 pandemic offering scammers new opportunities.
The committee heard throughout its inquiry that pension scammers have moved online, with regulators powerless to hold search engines and social media to account for hosting scam adverts as they do traditional media.
Tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings – a practice the committee describes as ‘immoral’.
The report calls for the multi-agency task force set up to tackle pension fraud to be strengthened. It also urged the Financial Conduct Authority (FCA) to ‘raise its game’ and publish information about its enforcement action.
Stephen Timms MP, chair of the Work and Pensions Committee, said: “With global firms such as Google being increasingly influential as providers of information, consumers looking for financial advice are being let down by not being afforded the same level of protection they receive from adverts which appear on television or in a newspaper. There must now be parity across the media to ensure all adverts are regulated and the government should use its Online Safety Bill to act.
“Tighter online regulation must be just the first step in improving protections for savers. Stronger enforcement with a new Pensions Scams Centre, a more effective FCA and extra support for victims are also desperately needed. Pension scams can cause huge financial harm and psychological distress and any one of us saving for the future is at risk of falling prey to a scammer. The government and the regulators have been left playing catch-up following the pension freedom reforms and must now act quickly to protect savers and their hard-earned money.”
Yvonne Braun, director of long-term savings and protection at the Association of British Insurers, said: “Pension scams have caused untold misery for tens of thousands of people and this report makes many helpful recommendations which we warmly welcome.
“Efforts to combat and deter fraudsters must be stepped up urgently by the authorities to change fraudsters’ risk / reward trade-off. Fraudsters are also increasingly using online channels and social media, and we strongly support including financial scams in the Online Safety Bill. Until legislation is in place, we also agree that social media platforms should immediately remove content at a regulator’s request to protect consumers from financial scams.”