Social media bosses were labelled a ‘disgrace’ in the Houses of Parliament today for failing to do enough to stop online scams in an extraordinary attack by a furious committee chairman.
Conservative MP Julian Knight left executives from YouTube, Facebook, TikTok and Twitter sitting in silence as he condemned their refusal to share information on scam artists with each other to protect the public.
He demanded that all four companies paid back money that had been defrauded off Britons for ‘many years’ while the firms were taking adverts from companies not authorised by the Financial Conduct Authority (FCA).
Mr Knight said none of the companies share the data with each other and were only doing so with the ‘already overworked’ police, giving scammers a better chance of targetting social media users on different platforms.
He compared this to the Mail Order Protection Scheme (Mops), an old scheme run by newspapers where direct response adverts were vetted before publication and the findings shared with other publishers to protect readers.
Pausing his questioning of the four bosses today, an exasperated 50-year-old Mr Knight issued the attack around 20 minutes into a Digital, Culture, Media and Sport sub-committee on online harms and disinformation today.
He spoke to ‘all social media platforms’ – including witnesses Iain Bundred, YouTube’s head of public policy in the UK and Ireland; Richard Earley, the UK public policy manager for Facebook owner Meta; Elizabeth Kanter, TikTok’s director of government relations and public policy; and Niamh McDade, Twitter’s deputy head of UK policy.
Conmen stole £754million from Britons through fraud in just the first half of 2021 which was an increase of 30 per cent on the previous year according to trade group UK Finance – with most of these scams originating online.
Conservative MP Julian Knight condemned the refusal of social media firms to share details on scam artists with each other
Niamh McDade (left), Twitter’s deputy head of UK policy; and Elizabeth Kanter (right), TikTok’s director of government relations and public policy, both gave evidence during the Digital, Culture, Media and Sport sub-committee hearing today
Also giving evidence to the Digital, Culture, Media and Sport sub-committee today were Richard Earley (left), the UK public policy manager for Facebook owner Meta; and Iain Bundred (right), YouTube’s head of public policy in the UK and Ireland
Interrupting an answer being given by Mr Earley today, Mr Knight said: ‘I’ll be honest with you, my thoughts – this goes to all social media platforms, frankly – is that you ought to pay back the money that has been defrauded off the British public over many years while you have been taking adverts which are not FCA authorised.’
Mr Knight has plenty of expertise in the media industry having been a personal finance and consumer rights journalist before entering the House of Commons.
The MP for Solihull started off as a personal finance reporter for BBC News before becoming the money and property editor for the Independent on Sunday in 2007.
And he told today’s hearing in the Grimond Room at Portcullis House: ‘Now I used to work in the dim and distant past in the newspaper industry and at that stage we used to have Mail Order ‘Mops’, it was called.
‘You used to be able to see precisely whether or not a company had a deposit, whether or not it was authorised therefore to trade, and whether or not it could effectively advertise in your newspaper.
‘And if you found that there was any sort of idea or linkeage or the idea that effectively these companies could not so, you phone each other up, you got on the phone, you told each other this company is dodgy and do not take their adverts.’
He continued: ‘Now I don’t see anything in what you’ve just said there, in fact I know across all your companies, none of you have effectively even shared this data with each other – you do share it to the police, they’re already overworked – but you don’t do it with each other.
‘And then secondly, as a result, you have for many years taken money from these scam artists and not actually made sure, the one thing you could do to stop it, which is to prevent anyone advertising with you who was not FCA authorised.
‘Personally, I think that’s a disgrace and I think it’s been going on for far too long. And each and every one of your companies should refund the British public any scam money they’ve been removed.
‘That’s actually not a question. That’s an observation I have to say at this point. But I just have to say anything you say in that regard, I think you’ve just not done enough over a long period of time.’
It comes after Culture Minister Chris Philp told MPs last week that there are a ‘number of areas’ where the Online Safety Bill can be ‘improved substantially’, with a revised piece of legislation expected in the coming months.
All four social media bosses appeared at the Digital, Culture, Media and Sport sub-committee hearing via videolink today
MPs have been debating a report by the Joint Committee on the Draft Online Safety Bill, which said more offences needed to be covered.
These included paid-for scam and fraudulent advertising, cyber flashing, content promoting self-harm and the deliberate sending of flashing images to people with photosensitive epilepsy.
The Bill must also be clearer about what is specifically illegal online and proposed that pornography sites should have a legal duty to keep children off them regardless of whether they host user-to-user content, the report added among other recommendations.
The legislation is expected to force the biggest operators, such as Meta – formerly Facebook – and Google, to abide by a duty of care to users, overseen by Ofcom as the new regulator for the sector.
It comes as Ministers revealed today that cryptocurrency adverts will have to meet the same standards as other financial promotions, such as insurance, to help protect people from potentially misleading claims.
Promotions will be brought into line with other financial advertising, ensuring they are fair and clear, and helping people to make informed decisions, the Government said.
Under the plans, the promotion of cryptoassets will come under FCA rules – in line with other financial promotions, for example, stocks, shares, and insurance products.
The Government said this will balance the desire to encourage innovation with the need to ensure adverts are fair, clear, and not misleading.
Around 2.3 million people in the UK are thought to own cryptoassets but research suggests some users may not fully understand what they are buying – posing a risk that products could be mis-sold. Around £300 of cryptoassets are held on average.
The changes will be brought in by amending the Financial Promotion Order, which sets out the investments and activities to which the financial promotion regime applies.
Under the Financial Services and Markets Act 2000, a business cannot promote a financial product unless they are authorised by the FCA or the PRA (Prudential Regulation Authority), or the content of the promotion is approved by a firm which is.
Firms that wish to promote such investments and activities must comply with binding rules that financial promotions must be fair, clear, and not misleading.
The legislation will be brought forward once parliamentary time allows, the Government said.
Santander UK recently warned that around £1 million of cryptocurrency scams were being reported to it by customers each month.
The bank said it had seen an increase in the value of such cases, which can involve a fraudster taking over a victim’s computer and freezing them out of their accounts.
Customers may see adverts online for cryptocurrency investment ‘opportunities’, or be introduced to them by other social media users, and adverts can appear to be endorsed by celebrities.