Quilter calls on the Prime Minister to tackle investment scams
Quilter, a FTSE 250 listed wealth manager, has written to the UK Prime Minister and the Minister for Digital and Culture calling on the government to include scams and other financial harms within scope of the forthcoming Online Safety Bill.
The letter called for urgent and decisive government action to tackle the growing threat of online investment scams, but said that the Online Advertising Programme – which was proposed by the government as the solution to investment scams – will not provide the robust consumer protections required, and instead the government should include scams in the Bill.
Quilter has seen first-hand the ease with which scammers can impersonate regulated financial services firms to promote fraudulent adverts on search engines, and believes the government must heed calls from numerous consumer groups, trade associations and MPs to include scams in scope of the Bill.
This will ensure that search engines and social media platforms have legal responsibility for the content that appears on their sites, and that they will have a duty of care to ensure that users are not exposed to financial harm.
Recent figures from Action Fraud demonstrate that GBP78 million was reported to have been lost to clone firm investment scams in 2020, with the average loss in each individual case standing at GBP45,242. Sadly, many cases will not be reported so the true figure lost will certainly be much higher.
Quilter’s own analysis of the FCA’s warning list shows that ‘clone firm’ investment scams – which involve an impersonation of a financial services firm – have increased by over 600 per cent since 2010, and now account for over a third of all FCA warnings issued in the past decade.
Paul Feeney, CEO, Quilter, says: “The way people search for investment opportunities is changing, with more and more people going online and on social media for tips on where to put their money. But the regulation of the internet isn’t yet fit for the 21st century, and consumers are paying the price.
“Consumers need greater protections from scams, and the government can achieve this by including scams in the Online Safety Bill so that tech companies have a legal responsibility to ensure that their users are not exposed to financial harm.
“Search engines are having their cake and eating it by taking money to host adverts from both the regulator and the scammers themselves. Something has to change to stop this ludicrous situation, and the Online Safety Bill is the ideal time to take decisive action.”