Wealth manager and Financial Planner Quilter has written to the Prime Minister and the Minister for Digital and Culture calling on the government to include scams and other financial harms within the scope of the upcoming Online Safety Bill.

The letter said the Online Advertising Programme proposed by the government as the solution to investment scams will “not provide the robust consumer protections required” and that the government needs to include scams in the upcoming Bill instead.

By including investment scams in the Bill, the Financial Planning firm said this will ensure that search engines and social media platforms have legal responsibility for the content that appears on their sites, and will have a duty of care to ensure that users are not exposed to financial harm.

According to Action Fraud, £78m was reported to have been lost to clone firm investment scams alone in 2020, with the average loss in each individual case standing at £45,242.

Quilter’s analysis of the FCA’s warning list said that clone firm investment scams (which involve an impersonation of a financial services firm) have increased by over 600% since 2010, and now account for over a third of all FCA warnings issued in the past decade.

Quilter has seen itself impersonated by clone firms in the past. The FCA issued a warning in March 2020 after Quilter Private Client Advisers, Quilter Cheviot Investment Management and Quilter plc were targeted by clone scammers. 

Paul Feeney, CEO of Quilter, said: “The way people search for investment opportunities is changing, with more and more people going online and on social media for tips on where to put their money. But the regulation of the internet isn’t yet fit for the 21st century, and consumers are paying the price.

“Consumers need greater protections from scams, and the government can achieve this by including scams in the Online Safety Bill so that tech companies have a legal responsibility to ensure that their users are not exposed to financial harm.

“Search engines are having their cake and eating it by taking money to host adverts from both the regulator and the scammers themselves. Something has to change to stop this ludicrous situation, and the Online Safety Bill is the ideal time to take decisive action.”