Pressure mounts on tech giants to curb online pension scams

The government is facing calls to force the tech giants to do more to protect their users from pension scams, after the UK’s pensions minister said “Google cannot be trusted”.

This week, Guy Opperman told savers and pensioners to “be very careful” about what they read online after saying people were being scammed by cloned investment sites, advertised mostly on Google, but to a lesser degree on Facebook, Instagram and LinkedIn.

“They think they are accessing a legitimate investment company. Sadly for many they are not,” the minister tweeted.

“I want to stop pensioners and savers being deceived: we have banned cold calling and brought in protections on pension transfers, but if what you read online is too good to be true it probably is. Please be v careful.”

The minister tweeted that Google, the search engine, “can no longer be trusted as they don’t vet their advertisers”.

“Google could fix this problem literally tomorrow: they simply need to verify the advertiser before taking their money,” said Opperman.

“It would cost. But then again in 2019 the parent company allegedly made $89bn profit.” The minister was clearly referring to the $89.96bn annual gross profit reported by Google parent Alphabet.

His intervention came as online marketplace eBay this week became the first major tech group to say it is open to joining Stop Scams UK, a new group backed by all of the country’s big banks and telecoms groups including Vodafone and BT, as the sector faces a growing threat of legislation to force companies to take action.

Investment fraud has risen sharply in recent years, in part fuelled by scammers taking advantage of a regulatory loophole which sees online financial promotions not subjected to the same consumer protection checks as advertising in the traditional media, such as newspapers and television.

The Pension Scams Industry Group, an industry body, has estimated that up to £10bn of pension savings may have been lost to scams since 2015, when pension access rules were liberalised.

Last month, the House of Commons work and pensions select committee recommended the government force the tech giants, including Google, Facebook and Instagram, to vet the financial promotions they run.

Following the minister’s comments this week, Which?, the consumer group, also called on the government to subject tech groups to the same legal requirements for financial promotions as traditional media.

“Our research has shown time and again that tech giants like Google are failing to take responsibility for preventing fraudulent adverts which can lead to victims losing life-changing sums of money to sophisticated scams that often devastate their lives,” said Gareth Shaw, head of money with Which?

“Online platforms have to be given a legal responsibility to identify, remove and prevent fake and fraudulent content on their sites.”

A Which? survey of 206 investment scam victims found that while one in seven were targeted by phone, four in 10 were targeted via online methods.

These included via email (12 per cent), search engines (10 per cent), adverts on Facebook (9 per cent) or other non-social media/search engine online adverts (8 per cent).

Shaw said the government could legislate to protect savers better against online scams through the online safety bill, which is progressing through parliament. This legislation aims to make the internet a safer place for users but does not as yet cover the risks of financial harm from scam promotions.

Google said: “Protecting consumers and credible businesses operating in the financial sector is a priority for us.”

“We have been working in consultation with the Financial Conduct Authority for over a year and have implemented new measures to address the bad actors in this space.”

Google said it had removed 3.1bn “bad ads” in 2020 from its platforms.

Last month, the government said it was exploring all options to determine the most effective way to tackle online fraud, and was working closely with industry, regulators and consumer groups to consider additional legislative and non-legislative solutions.

Measures due to come into force this year will give trustees and scheme managers powers to block or delay pension transfers delaying if there is a sign of a fraud attempt.