The bill will require tech firms to take responsibility for fraudulent user-generated content, including financial fraud such as romance scams or fake investment opportunities.
This is an indication, according to adviser trade body Pimfa, that the government has gone some way to acknowledge the damage that financial fraud can have on people.
Initially, any hopes that Her Majesty might reveal the government's intention to widen the scope to include all financial scams, including adverts hosted on social media channels by fake investment or insurance companies, were dashed.
Then late on May 12, the DCMS capitulated to pressure, and announced: "Today we are announcing that the Online Safety Bill brings user-generated fraud into the scope of the regulatory framework."
Aegon's Smith says: "We’re absolutely delighted the government has listened to the pension industry’s concerns and included financial scams, including pension and investment scams, in the Online Safety Bill.
"Pension and investment scams have flourished during the pandemic as fraudsters have exploited our increasing reliance on all things digital."
In January this year, Labour MP Stephen Timms, chairman of the work and pensions committee, told FTAdviser in Focus that he was pushing for the online safety bill to include financial harms.
At the time, he pledged to table an amendment in the Commons to ensure that Britons would be protected from financial fraud, with figures from Action Fraud citing £373m was lost between 2019 to 2020 to repeat scams alone, with the average person losing £21,100 in repeat stings.
Responding to the Queen's Speech, Timms says: "Every day that goes by without proper regulation of online adverts gives scammers a free pass to prey on people on the internet.
"Only by holding internet giants truly responsible for the content which they promote will savers start to receive the protection they desperately need from scammers and fraudsters.”
In a report on pension scams published in March, the WPC called on the government to legislate against online investment fraud.
This report recommended that, in order to create parity between traditional media – such as TV and newspapers – and new media, including search engines and social networks, paid-for advertising on online platforms should be covered by the regulatory framework for financial promotions.
This would require online publishers to ensure that any financial promotion they communicate has been approved by an authorised person or is exempted from the financial promotions regime.
Tommy Burns, risk and financial crime manager at the Phoenix Group, agrees. He says: "Fraudulent activity has been rife in the last year, and younger generations have suffered too, with 29 per cent of 18 to 34-year-olds falling victim to a scam causing them to lose money or have their personal details compromised.
