MPs say Big Tech firms should pay scam victims

MPs say existing regulations make it easy for criminals to defraud people on social media

British lawmakers have called on the government to ensure that tech giants reimburse people for money lost to fraudulent advertising seen on their platforms.

MPs argue that current regulations are insufficient and make it easy for criminals to defraud people on social media sites like Facebook and Twitter.

The lawmakers believe forcing tech firms like Meta and Google to reimburse victims will force them to take the issue seriously, and work to eliminate fraud on their platforms.

"The government should look at some kind of arrangement that makes the polluter pay," Mel Stride, chairman of the UK parliament's cross-party Treasury committee, told Reuters.

"Online platforms are hosting this stuff, not really putting enough effort into weeding it out, and indeed financially benefiting because they're getting the advertising revenues," he added.

The Treasury Committee released the finding of a report on economic crime this week, calling for more accountability from Big Tech.

Online fraud is rampant and has increased throughout the epidemic, with UK citizens losing more than £2.3 billion to cyber scams between April 2020 and April 2021 - and those are only reported crimes. The real amount could be significantly higher.

Action Fraud, a financial crime watchdog monitor, reported a whopping 36 per cent increase in fraud last year, with 420,000 offences detected.

In May, the NCSC said that a surge in coronavirus-themed cyber crime since the start of the pandemic led to the agency recording a massive 15-fold increase in the removal of online fraud in 2020 compared with 2019.

The UK's communications regulator Ofcom also considers scams and data hacking as the top concerns for UK adults accessing the internet.

Fraudulent advertising, a form of online scam, either features endorsements from celebrities, pushes items for sale on fake websites, or touts schemes that offer early access to pension pots or cryptocurrencies.

In April, a new study by consumer group Which? found that Facebook and Google were failing to remove online scam adverts, despite being reported by fraud victims. Although tech giants claim to have improved their reporting functions, Which? found that the process of reporting was often complex or not straightforward.

Andrew Forrest, an Australian billionaire, today launched a criminal case against Facebook, claiming that the company has faild to remove scam adverts using his image to promote scam investments.

British lawmakers have also urged the government to pass legislation immediately requiring financial services providers to refund victims of 'push payment scams', which cost victims £479 million last year.

Criminals use this type of fraud to trick victims into sending money to them.

The Treasury Committee report also recommended that law enforcement be adequately resourced to address the scale of the problem. It highlighted how "bewildering" the number of agencies tasked with combating economic crime and fraud is, suggesting that a single body would be more effective.