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Tech giants Google and Facebook are making money off the pension scam industry by showing ads on their platforms placed by fraudsters, a parliamentary committee said Sunday.
The Work and Pensions Committee has urged the government to act to protect savers, five years after pension freedoms were introduced by the government allowing people to tap into their funds before retirement, Law360 reported.
Chairman of the committee Stephen Timms said that change had brought more choice for savers on how to use their pension pots, but had also “opened a whole new world of opportunity” for scammers and fraudsters.
The Pension Scams Industry Group estimated £10 billion had been lost by 40,000 savers since the reforms were introduced, Law 360 reported.
“At the same time, a woeful lack of online regulation has helped them reach more people than ever before,” Timms said.
“The result is an online free-for-all, where scammers can advertise with impunity while the tech giants line their pockets from the proceeds of their crimes.”
Meanwhile, the coronavirus pandemic has bred an outbreak of pension scams as scammers are taking advantage of people’s financial worries during lockdown by preying on pension holders.
Sunday’s report came after a public inquiry into pension fraud that began July 2020, Law360 reported.
The committee said Sunday that, like newspapers and broadcasters, online companies should be held responsible for the ads placed on their platforms.
It added that tech giants like Google were accepting payment to advertise scams, and then taking more advertising dollars from governments posting ads warning about such scams.
It called for protections against the practice to be built into an upcoming Online Harms Bill.
The legislation proposes to force internet companies like Facebook and Google to remove content associated with child abuse, terrorism or suicide, or face large fines.
The committee said Sunday that scams and other forms of financial fraud should also be included in the bill.
Google said it had updated its financial services policies and removed 3.1 billion “bad ads” from its platforms, 123 million of which were related to financial services, Law360 reported. It would now require verification for UK financial services companies proposing ads on its platforms.
Rocio Concha, Director of Policy and Advocacy at consumer protection group Which? said the report was a “damning indictment of the approach of tech giants like Google to tackling scams.”
“These companies have some of the most sophisticated technology in the world, yet they are failing to utilise it to prevent scammers from abusing the platforms by using fake and fraudulent content on an industrial scale to target victims and devastate lives.”
Concha said the case for including scams in an online safety bill was overwhelming.
“The government must not miss the opportunity to act now.”
Do you think online platforms such as Google and Facebook should be responsible for the ads they display? Let us know in the comments!
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