The Government must listen to its own financial regulator and
legislate to ensure global tech firms can be held properly
responsible for hosting pension scam adverts online.
In its response to the Work and Pensions
Committee report on pension scams, published today, the
Government rejects the Committee’s recommendation that the
forthcoming Online Safety Bill should tackle fraud facilitated
through paid-for advertising, such as adverts for pension
products on search engines. There will instead be a consultation
on online advertising regulation later in the year.
The Government’s stance is in direct contrast to that of the body
responsible for regulating financial promotions. In a letter
responding to the Committee’s report, also published today, the
Financial Conduct Authority warns that online advertising is ‘the
major source of problems leading to very significant consumer
harms’ and backs calls for financial harms to be included in the
legislation, which was brought forward in the Queen’s speech.
Rt Hon MP, Chair of the Work and Pensions Committee,
said: “Ministers claim to understand the devastating impact
of illegal activity online, but by constantly failing to act
against paid for adverts online they remain at odds with their
own enforcement agency and totally ambivalent to what the FCA
warns is a major source of harm.
The FCA sees the damage being done to consumers by online
scams day in day out. It doesn’t think it has enough powers to
protect people, yet still the Government cannot be cajoled into
action. A vague promise to consult later this year is too little
too late. Without backing words with action, the law will remain
toothless and continue to allow scammers to advertise with
impunity while tech giants line their pockets from the proceeds
of crime.”
The Committee’s report, published in March,
called on the Government to 'act quickly and decisively' to
protect pension savers, more than five years on from the
introduction of the pension freedoms, which put people at risk of
a much wider range of scams and fraud.
The Government addresses each of the Committee’s recommendations
in its response.
