An overwhelming majority of the public supports calls on the Government to combat scam financial ads in its forthcoming Online Safety Bill, new research shows.
Some 87 per cent of those surveyed believe it should legislate to ensure search engines and social media sites do not mislead consumers or promote financial scams.
MPs recently slammed the Government for defying demands to cover paid-for ads, such as those on search engines like Google, in pending new legislation – despite backing for this also coming from regulators, top financial firms and consumer group Which?.
Public support: Nine out of 10 people polled back calls to make tech giants ensure online ads are not fraudulent
The public polling by Aviva, revealed in a new fraud report, also found that 53 per cent of internet users don’t trust that the adverts on search engines are placed by a legitimate financial services company or provider.
Some 56 per cent don’t believe that search engines verify the authenticity of financial products, services or providers that they allow to be advertised on their sites.
The damning findings reveal that people are increasingly alert to soaring cases of online fraud, and their scepticism towards financial adverts could help some to protect themselves.
Sophisticated scammers are running fake adverts and ‘cloning’ legitimate firms and their operations, even down to assuming the names of real staff.
>>>How to check you are dealing with a legit financial company: Find out below
MPs, financial firms, regulators, consumer groups and crime experts have all sought to raise the alarm, and succeeded in generating a lot of media coverage to warn the public.
But they have failed to convince the Government to use the forthcoming Online Safety Bill to hold global tech firms responsible for hosting scam adverts.
User-generated internet content will be included in the bill, and the Government says it is looking into how advertising can enable online fraud and will hold a consultation later this year. Read its full statement below.
Criminal gangs are using legit-looking clone sites to steal ‘big money’
Phil Rolfe, a financial crime expert, calls for urgent action to fight the fraud menace and explains how to protect yourself here.
Clone fraud: Criminals are luring investors to fake comparison sites touting bogus products in order to steal their cash
Meanwhile, Google has announced it will require financial services advertisers to be authorised by the Financial Conduct Authority, and other measures to crack down on fraud.
Fraudsters are using bogus websites, forged documents, fake adverts on social media and search engines, and the names and near-identical email addresses of people working in the finance industry to impersonate real companies.
Even reputable websites can be targeted through third party advertising exchanges by fraudsters constantly changing adverts to get through blocks.
The Aviva report also highlighted the threat from accident management adverts, where scammers pose as insurers or their agents to run up huge bills for car services, and adverts for ‘ghost brokers’ who tempt internet users with low insurance premiums.
It found a significant age difference in the likelihood someone would trust an online advert, with over-55s less likely to do so than younger internet users.
Some 29 per cent of over 55s would trust the results of a search engine compared with 59 per cent of 16–24 year olds.
Meanwhile, 30 per cent of people overall would be embarrassed to admit to to friends, family or the authorities that they had been the victim of a financial scam. Aviva carried out a nationally representative survey of 2,000 people this summer.
According to its report: ‘While the types of financial scams are generally the same as those before the pandemic, coronavirus has been used as the hook to lure victims. Being in lockdown has meant more people using the internet to search for, and buy, financial services and products.
‘The scams range from attempts to sell people unsuitable car insurance to, at worst, stealing their entire retirement savings. Imitation websites that copy-cat well-known financial services brands, and misleading adverts are now commonplace.
‘The impact on victims is not just financial either, it has a detrimental effect on people’s mental wellbeing too.’
Rob Lee, director of fraud prevention at Aviva, says: ‘Government policy is aimed at ensuring the UK is one of the safest places in the world to be online, which we support. But Aviva’s research shows that there is a long way to go on this journey.
‘Online doesn’t mean above board. With fraud undermining consumer trust in financial services, it’s vital that the industry continues to work together with the authorities to protect the public and our customers.
‘Currently, there’s no legal responsibility for technology firms to verify the legitimacy of the companies which pay them to publish adverts on their platforms.
‘This potentially leaves millions of internet users exposed to unscrupulous adverts. If the Government is to realise its ambition, then we believe financial scams promoted by paid-for adverts should be included in the Online Safety Bill.’
Stephen Timms MP, chair of the work and pensions committee, says: ‘Aviva’s research clearly highlights the widespread strength of feeling that the Online Safety Bill should tackle fraudulent paid-for adverts.
‘In our committee’s recent report, we drew attention to the fact that fraudulent adverts for pensions products on search engines are feeding a multibillion-pound scam industry, with devastating consequences for scam victims.
‘It is not too late to ensure that the Online Safety Bill protects these consumers. Last month I wrote to the Prime Minister, with the Chair of the Treasury Committee, urging that the scope of the Bill be extended to tackle fraud through paid-for advertising. He has not replied.
‘This change has the support of the public, the regulators, the industry and two cross-party select committees. The Government’s insistence that the issue will be considered in a consultation later this year is too little too late. It must now stop dragging its feet, and act.’
A Government spokesperson says: ‘We have brought user-generated fraud into the scope of our new online laws to increase people’s protection from the devastating impact of scams.
‘The move is just one part of our plan to tackle fraud in all its forms. We continue to pursue fraudsters and close down the vulnerabilities they exploit, are helping people spot and report scams, and we will shortly be considering whether tougher regulation on online advertising is also needed.’
Google was approached for comment but did not respond by the time of publication. It’s previous statement can be found here.
I nearly lost £85k of my life savings to a fraudster
Aviva includes an anonymous victim’s story in its latest fraud report.
I’d been contacted out of the blue by somebody claiming to be a representative from Aviva, who got me interested in investing in an Aviva Bond.
Sophisticated scammers are running fake adverts and ‘cloning’ legitimate firms and their operations, even down to assuming the names of real staff.
After some thought, I contacted the Aviva switchboard to speak to the individual again – I gave them his name.
As I couldn’t speak to him over the phone, I was given the email address for his personal assistant. I then wrote an email to the individual at Aviva and his PA.
I got an email back from his PA who seemed quite confused, having not recognised the email address for her manager. She spoke to her manager at Aviva, who was concerned and therefore contacted me himself.
It turns out the representative who had contacted me was a fraudster pretending to be a real person working for Aviva.
Fortunately, the Aviva financial crime team contacted me just in time.
I was on the verge of investing £85k of my life savings. What’s worse is that I’d also recommended the fake bond to a friend. We both had a very lucky escape.