Government must prioritise scam victim protection in the Online Safety Bill

Which? has written to the Prime Minister to urge the government to commit to tackling fraud via the upcoming Online Safety Bill.

The letter is co-signed by a coalition of consumer groups, charities and financial services industry bodies. It comes at a time when fraud is the widest reported crime in the UK, costing households an estimated £2 billion a year.

You can read the letter in full at the bottom of this article.

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Government must find a solution to combat online fraud

The coalition wants the government to commit to progressing the Online Safety Bill as soon as possible. We believe fraud protections in the bill could prevent hundreds of millions of pounds being lost to scams every year by making big tech firms take responsibility for fraudulent online ads.

We welcome the indication that the Bill will return to parliament this session. However, any delays to it being passed into law could make consumers vulnerable to the continuation of online scams. This is a particular concern during the ongoing cost of living crisis. 

The effects of fraud on financial and mental wellbeing

Action Fraud, the national fraud reporting centre, says victims reported total losses of £1.7 billion to scams over the last 12 months. This works out at nearly £200,000 every hour.

Fraud can also have a devastating effect on physical and mental health. Which? has estimated that the cumulative cost of online fraud to wellbeing is £7.2 billion. In addition, Action Fraud received between 300 and 350 reports per week in 2021 where scam victims were severely emotionally distressed.

The coalition's letter to the Prime Minister in full

Dear Prime Minister, 

As the widest reported crime in the UK, fraud is one of the greatest and most destructive online harms facing British consumers today, costing households approximately £2bn a year. In addition to the life changing sums of money lost, being scammed can take a devastating toll on people’s mental and physical health. 

Which? estimates the cost to wellbeing at £7.2bn per year, while in 2021 Action Fraud received between 300 to 350 reports per week where victims showed signs of severe emotional distress due to being scammed, with some needing emergency services dispatched to their homes. While major platforms profit from selling ad space to scammers, much of the money stolen ends up funding organised crime around the world.

The pandemic only increased the need for urgent action, leading to a huge rise in reported instances of fraud as scammers took advantage of emerging consumer vulnerabilities. The intensifying cost of living crisis now presents fresh opportunities for fraudsters to target struggling consumers.

As a coalition of consumer groups, charities and financial services industry bodies, we have been delighted to see scam advert protections within the Online Safety Bill progress through Parliament over recent months and strengthened at each stage of the legislative process to ensure they can best address the most widespread form of online harm: fraud.

We were pleased to hear your recent comments indicating that the Online Safety Bill will return to Parliament this session. The unrelenting scale of harm caused by online fraud – through both user generated content and particularly scam advertising – and the rate at which the problem is increasing, means that consumers cannot afford to wait for these vital protections. Further delays to the Bill will result in the continued perpetuation of online fraud, costing people – many of who are already struggling with the cost of living crisis – dearly, devastating their lives and finances beyond repair.

The Government, under your leadership, must commit to finding the quickest and most effective solution to shield UK citizens from becoming victims of fraud – ideally by championing this element in the Online Safety Bill through Parliament as soon as possible. This Government has a unique opportunity to make the internet a safer place for British consumers and to not simply kick this problem down the road.

We look forward to working with you to finally put a stop to online scams. 

Yours sincerely

Which?
Association of British Insurers (ABI)
Carnegie UK
City of London Corporation
City of London Police Authority
Money and Mental Health Policy Institute (MMHPI)
Money Saving Expert (MSE)
Personal Investment Management & Financial Advice Association (PIMFA)
TheCityUK
UK Finance