PIMFA calls for FCA to be given power to direct Ofcom to remove fraudulent content in Online Safety Bill

26 May 2022

PIMFA calls for FCA to be given power to direct Ofcom to remove fraudulent content in Online Safety Bill

PIMFA, the trade association for the wealth management, investment services and the investment and financial advice industry, has called for the Financial Conduct Authority (FCA) to be given the power to direct Ofcom to act over potentially fraudulent online adverts or user generated content that appear on search engine and social media platforms in evidence to MPs scrutinising the Online Safety Bill today (26 May 2022).

Tim Fassam, Director of Government Relations and Policy at PIMFA, called for an amendment to the Bill that would see partner regulators such as the FCA provide strategic support to Ofcom to prevent harm being introduced to financial services consumers.

While the Bill deals very specifically with fraud and breaches of the Financial Services and Markets Act (FSMA) it is unclear how Ofcom will ensure it has the expertise needed to identify breaches. Mr Fassam pointed to the case of London Capital & Finance where the regulated firm was able to introduce harm into the market through the sale of unregulated, speculative mini bonds aided specifically by advertising, offering significant returns in a low interest rate economy. If the FCA were able to swiftly prevent adverts of this nature through Ofcom it could significantly reduce the risk of potential harm to consumers.

He said PIMFA was also supporting a Which? amendment to the Bill to ensure that search engines had the same duty of care as social media websites to eliminate fraudulent adverts on their platforms.

Mr Fassam commented: “Scams and fraud are the most prevalent form of crime in the UK, and it is important UK laws are focused on where and how that crime is perpetuated. The pandemic led to UK society becoming increasingly isolated and naturally taking solace online. Since then we have seen a worrying rise in incidents of fraud, up 41% compared with pre-pandemic and 9% of all UK adults reporting being a victim of fraud. This represents a real financial loss of £2.6bn for the UK, while the emotional and physical toll it takes is estimated to be the equivalent of £9.3bn per year.

“It is vital that UK laws are constructed to ensure that UK consumers are adequately protected online. In our view, this Bill represents significant progress in ensuring that this is the case. However, the Bill is not without its faults. We believe the amendments PIMFA, Which? and our coalition partners have called for – as when we called for fraud to be a priority harm within the Online Safety Bill in the first place – will ensure the Bill is more effective in preventing thousands of people suffering at the hands of fraudsters.” 

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA  leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments. 
• PIMFA has made numerous recommendations to the FCA regarding the Future of Advice, Future of Supervision and the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225