Online fraud is now set to be included in the upcoming Online Safety Bill after the government acknowledged “significant concern” over its exclusion.
The pensions and wider finance industry expressed disquiet after the Queen's Speech when it appeared online fraud had been omitted from the bill and the new parliamentary year's legislative plans.
However, in a statement alongside a draft of the bill released on 13 May, secretary of state for digital, culture, media and sport Oliver Dowden said the government would legislate for better protection.
"Since the publication of the full government response in December 2020, there has been significant concern about the exclusion of online fraud from the legislation," he said. "This government understands the devastating effect that online fraud can have on its victims, so today we are announcing that the Online Safety Bill brings user-generated fraud into the scope of the regulatory framework."
Dowden said the change to the framework would "aim to reduce some specific types of fraudulent activity". He also announced the Home Office would work with other government departments and more widely with law enforcement and private sector organisations to develop a ‘fraud action plan'.
Dowden confirmed there was also "potential for further legislation if necessary".
Aegon head of pensions Kate Smith said: "We're absolutely delighted that 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. While this is great for keeping us connected, there is a dark side which can compromise our financial security."
Financial scams have continued to rise in the last year, particularly due to Covid-19, with data from Action Fraud finding almost 90,000 reports of fraud in the first two months of 2021. These came at an estimated cost of £406.5m, with 4,450 reports of investment fraud valued at £109.6m over the same period.
"The importance of this legislation shouldn't be underestimated as it will protect people from the growing menace of online financial scams and hopefully make the internet a safer place for all," Smith continued.
"It's important the Online Safety Bill is ambitious and flexible enough to deal with the constant evolving nature of scams, forcing online scams adverts and websites to be taken down quickly to minimise harm. This is just another piece in the jigsaw to combat financial fraud."
Smith said the government's proposed ‘fraud action plan' needed to be a ‘living document' to keep pace with scammers and enable "trends to be spotted quickly with decisive action to be taken against fraudsters".