Online Safety Bill (Fourth sitting)

Debate between Alex Davies-Jones and Caroline Ansell

Committee stage & Committee Debate - 4th sitting
Thursday 26th May 2022 Public Bill Committees

[Alex Davies-Jones]

Q I would just like to query your thoughts on a right to redress for victims. Do you think that having an ombudsman in the Bill would be appropriate, and what would you like to see to support victims of fraud?

Martin Lewis: As you will know, I had to sue Facebook for defamation, which is a ridiculous thing to do in order to stop scam adverts. I was unable to report the scam adverts to the police, because I had not been scammed—even though it was my face that was in them—and many victims were not willing to come forward. That is a rather bizarre situation, and we got Facebook to put forward £3 million to set up Citizens Advice Scam Action—that is what I settled for, as well as a scam ad reporting tool.

There are two levels here. The problem is who is at fault. Of course, those mainly at fault for scams are the scammers. They are criminals and should be prosecuted, but not enough of them are. You have times when it is the bank’s fault. If a company has not put proper precautions in place, and people have got scammed because it has put up adverts or posts that it should have prevented, they absolutely need to have some responsibility for that. I think you will struggle to have a direct redress system put in place. I would like to see it, but it would be difficult.

It is rather interesting to me that I am worried that the £3 million for Citizens Advice Scam Action, which was at least meant to provide help and support for victims of scams, is going to run out. I have not seen any more money coming from Facebook, Google or any of the other big players out there. If we are not going to fund direct redress, we could at least make sure that they fund a collective form of redress and help for the victims of scams, as a bare minimum. It is very strange that these firms go so quiet on this, and what they say is, “We are doing everything we can.”

From my meetings with these firms—these are meetings with lawyers in the room, so I have to be slightly careful—one of the things that I would warn the Committee about is that they tend to get you in and give you a presentation on all the technological reasons why they cannot stop scam adverts. My answer to them after about 30 seconds, having stopped what was meant to be an hour-long presentation, is, “I have not framed the fact that you need a technological solution. I have said you need a solution. If the answer to stopping scam adverts, and to stopping scams, is that you have to pre-vet every single advert, as old-fashioned media did, and that every advert that you put up has to have been vetted by a human being, so be it. You’re making it a function of technology, but let’s be honest: this is a function of profitability.” We have to look at the profitability of these companies when it comes to redress. What your job is—if you forgive me saying this—is to make sure that it costs them more money to let people be scammed than it does to stop people being scammed. If we solve that, we will have a lot fewer scams on social media and on the search advertising.

Rocio Concha: I completely agree with everything that Martin says. At the moment, the provisions in the Bill for “priority illegal content” require the platforms to publish reports that say, “This is how much illegal content we are seeing on the platform, and these are the measures that we are going to take.” They are also required to have a way for users to report it and to complain when they think that the platforms are not doing the right thing. At the moment, that does not apply to fraudulent advertising, so you have an opportunity to fix that in the Bill very easily, to at least get the transparency out there. The platform has to say, “We are finding this”—that puts pressure on the platform, because it is there and is also with the regulator—“and these are the measures that we are taking.” That gives us transparency to say, “Are these measures enough?” There should also be an easy way for the user to complain when they think that platforms are not doing the right thing. It is a complex question, but there are many things in the Bill that you can improve in order to improve the situation.

Tim Fassam: I wonder if it would be useful to give the Committee a case study. Members may be familiar with London Capital & Finance. Now, London Capital & Finance is one of the most significant recent scams. It sold mini-bonds fraudulently, at a very high advertised return, which then collapsed, with individuals losing all their money.

Those individuals were compensated through two vehicles. One was a Government Bill; so, they were compensated by the taxpayer. The others, because they were found to have been given financial advice despite LCF not having advice permissions or operating through a regulated product, went on to the Financial Services Compensation Scheme, which, among others, our members pay for; legitimate financial services companies pay for it. The most recent estimate is over £650 million. The expectation is that that will reach £1 billion at some point over the next few years, in terms of cost to the economy.

LCF was heavily driven by online advertising, and we would argue that the online platforms were in fact probably the only people who could have stopped it happening. They have profited from those adverts and they have not contributed anything to either of those two schemes. We would argue—possibly not for this Bill—that serious consideration should be given to the tech platforms being part of the financial services compensation scheme architecture and contributing to the costs of scams that individuals have fallen foul of, as an additional incentive for them to get on top of this problem.

Martin Lewis: That is a very important point, but I will just pick up on what Rocio was saying. One of the things that I would like to see, as well as much more rigid requirements of how reporting scams can be put in place—because I cannot see proper pre-vetting happening with these technology companies, but we can at least rely on social policing and reporting of scams. There are many people who recognise a scam, just as there are many people who do not recognise a scam.

However, I also think this is a wonderful opportunity to make sure that the method, the language and the symbols used for reporting scams are universal in the UK, so that whatever site you are on, if you see an advert you click the same symbol, and the process is unified and universal, and works in a very similar way, so that you can report a scam the same way on every site, which makes it simpler, and we can train people in how to do it and we can make the processes work.

Then, of course, we have to make sure that they act on the back of reports, but simply the various ways it is reported, and the complexity, and the number of clicks that you need to make mean it is a lot easier generally to click on an advert than it is to click to report an advert that is a scam. And with so many scams out there, I think there should be a parity of ease between those two factors.

[Caroline Ansell]

Q May I ask, directly related to that, about the complaints procedure? What would you like to see in terms of changes there, to make it more unified, more universal and simpler? It has been suggested that it is not robust enough, not dynamic enough and not fast enough.

Rocio Concha: There were complaints from the users. At the moment, this Bill will not allow this for fraudulent advertising. So, we need to make sure that it is a requirement for the platforms to allow and to have an easy tool for people to complain and to report when they see something that is fraudulent. At the moment, the Bill does not do that. It is an easy fix; you can do it. And then the user will have that tool. It would also give us transparency for the regulator and for organisations such as ours, to see what is happening and to see what measures the platforms are taking.

Tim Fassam: I would agree with that. I would also highlight a particular problem that our members have flagged, and we have flagged directly with Meta and Instagram. Within the definition in the Bill of individuals who can raise concern about social media platforms, our members find they fall between two stools, because quite often what is happening is that people are claiming an association with a legitimate firm. So they will have a firm’s logo, or a firm’s web address, in their profile for their social media and then they will not directly claim to be a financial adviser but imply an association with a legitimate financial advice firm. This happens surprisingly frequently.

Our members find it incredibly difficult to get those accounts taken down, because it is not a fraudulent account; that individual is not pretending to be someone else and they are not the individual claiming pretence. They are not directly claiming to be an employee; they could just say they are a fan of the company. And they are not a direct victim of this individual. What happens is that when they report, it goes into a volume algorithm, and only if a very large number of complaints are made does that particular site get taken down. I think that could be expanded to include complaints from individuals affected by the account, rather than directly believing they are pretending to be that.