Examination of Witnesses

Online Safety Bill – in a Public Bill Committee at 3:25 pm on 26th May 2022.

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Tim Fassam, Rocio Concha and Martin Lewis gave evidence.

Photo of Roger Gale Roger Gale Conservative, North Thanet 3:50 pm, 26th May 2022

We will now hear from Tim Fassam, the director of government relations and policy at PIMFA, the Personal Investment Management & Financial Advice Association, and from Rocio Concha, director of policy and advocacy at Which? We will be joined by Martin Lewis, of MoneySavingExpert, in due course. Thank you to the witnesses for joining us. I call the Opposition Front Bench.

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport)

Q Thank you for joining us this afternoon. As a constituency MP, I am sure I am not alone in saying that a vast amount of my casework comes from members of my community writing to me to say that they have been scammed online, that they have been subject to fraud and that they feel horrendous about it. They feel shame and they do not know what to do about it. It is the single biggest crime in the UK, with victims losing an estimated £2.3 billion. In your opinion, does the Bill go far enough to tackle that?

Rocio Concha:

This Bill is very important in tackling fraud. It is very important for Which? We were very pleased when fraud was included to tackle the issue that you mentioned and also when paid-for advertising was included. It was a very important step, and it is a very good Bill, so we commend DCMS for producing it.

However, we have found some weakness in the Bill, and those can be solved with very simple amendments, which will have a big impact on the Bill in terms of achieving its objective. For example, at the moment in the Bill, search engines such as Google and Yahoo! are not subject to the same duties in terms of protecting consumers from fraudulent advertising as social media platforms are. There is no reason for Google and Yahoo! to have weaker duties in the Bill, so we need to solve that.

The second area is booster content. Booster content is user-generated content, but it is also advertising. In the current definition of fraudulent advertising in the Bill, booster content is not covered. For example, if a criminal makes a Facebook page and starts publishing things about fake investments, and then he pays Facebook to boost that content in order to reach more people, the Bill, at the moment, does not cover that fraudulent advertising.

The last part is that, at the moment, the risk checks that platforms need to do for priority illegal content, the transparency reporting that they need to do to basically say, “We are finding this illegal content and this is what we are doing about it,” and the requirement to have a way for users to tell them about illegal content or complain about something that they are not doing to tackle this, only apply to priority illegal content. They do not apply to fraudulent advertising, but we think they need to.

Paid-for advertising is the most expensive way that criminals have to reach out to a lot of people. The good news, as I said before, is that this can be solved with very simple amendments to the Bill. We will send you suggestions for those amendments and, if we fix the problem, we think the Bill will really achieve its objective.

Photo of Roger Gale Roger Gale Conservative, North Thanet

One moment—I think we have been joined by Martin Lewis on audio. I hope you can hear us, Mr Lewis. You are not late; we started early. I will bring you in as soon as we have you on video, preferably, but otherwise on audio.

Tim Fassam:

I would echo everything my colleague from Which? has said. The industry, consumer groups and the financial services regulators are largely in agreement. We were delighted to see fraudulent advertising and wider issues of economic crime included in the Bill when they were not in the initial draft. We would also support all the amendments that Which? are putting forward, especially the equality between search and social media.

Our members compiled a dossier of examples of fraudulent activity, and the overwhelming examples of fraudulent adverts were on search, rather than social media. We would also argue that search is potentially higher risk, because the act of searching is an indication that you may be ready to take action. If you are searching “invest my pension”, hopefully you will come across Martin’s site or one of our members’ sites, but if you come across a fraudulent advert in that moment, you are more likely to fall foul of it.

We would also highlight two other areas where we think the Bill needs further work. These are predominantly linked to the interaction between Ofcom, the police and the Financial Conduct Authority, because the definitions of fraudulent adverts and fraudulent behaviour are technical and complex. It is not reasonable to expect Ofcom to be able to ascertain whether an advert or piece of content is in breach of the Financial Services and Markets Act 2000; that is the FCA’s day job. Is it fraud? That is Action Fraud’s and the police’s day job. We would therefore suggest that the Bill go as far as allowing the police and the FCA to direct Ofcom to have content removed, and creating an MOU that enables Ofcom to refer things to the FCA and the police for their expert analysis of whether it breaches those definitions of fraudulent adverts or fraudulent activity.

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport)

Thank you, both. You mentioned that search is a concern, especially because it is currently out of scope of the Bill in terms of this issue. Another issue is that when people do use search to look for a financial service or something that they wish to purchase, the cookies are remembered. The algorithms on social media platforms are then triggered to promote specific adverts to them as a result of that search history or things they have mentioned via voice control to their home help devices. That is a concern. Digital advertising that you see on third-party websites is also not within scope. That has been raised as well. Do you have any thoughts on those pointsQ ?

Rocio Concha:

Yes. Open-display advertising is not part of the Bill. That also needs to be tackled. I think the online advertising programme should be considered, to tackle this issue. I agree with you: this is a very important step in the right direction, and it will make a huge difference if we fix this small weakness in terms of the current scope. However, there are still areas out there that need to be tackled.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Mr Lewis, I am living in hope that we may be able to see you soon—although that may be a forlorn hope. However, I am hoping that you can hear us. Do you want to come in and comment at all at this point? [Interruption.] Oh, we have got you on the screen. Thank you very much for joining us.

Martin Lewis:

Hurrah. I am so sorry, everybody—for obvious reasons, it has been quite a busy day on other issues for me, so you’ll forgive me.

Photo of Roger Gale Roger Gale Conservative, North Thanet

I can’t think why it has been.

Martin Lewis:

I certainly agree with the other two witnesses. Those three issues are all very important to be brought in. From a wider perspective, I was vociferously campaigning to have scam adverts brought within the scope of the Online Safety Bill. I am delighted that that has happened, but let us be honest among ourselves: it is far from a panacea.

Adverts and scams come in so many places—on social media, in search engines and in display advertising, which is very common and is not covered. While I accept that the online advertising programme will address that, if I had my way I would be bringing it all into the Online Safety Bill. However, the realpolitik is that that is not going to happen, so we have to have the support in the OAP coming later.

It is also worth mentioning just for context that, although I think there is little that we can do about this—or it would take brighter people than me—one of the biggest routes for scams is email. Everybody is being emailed—often with my face, which is deeply frustrating. We have flaccid policing of what is going on on social media, and I hope the Bill will improve it, but at least there is some policing, even though it is flaccid, and it is the same on search engines. There is nothing on email, so whatever we do in this Bill, it will not stop scams reaching people. There are many things that would improve that, certainly including far better resourcing for policing so that people who scam individuals get at least arrested and possibly even punished and sentenced. Of course, that does not happen at the moment, because scamming is a crime that you can undertake with near impunity.

There is a lot that needs to be done to make the situation work, but in general the moves in the Online Safety Bill to include scam advertising are positive. I would like to see search engines and display advertising brought into that. I absolutely support the call for the FCA to be involved, because what is and is not a scam can certainly be complicated. There are more obvious ones and less obvious ones. We saw that with the sale of bonds at 5% or 6%, which pretend to be deposit bonds but are nothing of the sort. That might get a bit more difficult for Ofcom, and it would be great to see the regulator involved. I support all the calls of the other witnesses, but we need to be honest with ourselves: even if we do all that, we are still a long way from seeing the back of all scam adverts and all scams.

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport)

Q Thank you, Mr Lewis. My final question is not necessarily about financial services advertising. With the rise of influencer culture, specifically on social media platforms such as TikTok and Instagram, we are seeing a failure to disclose adverts correctly and the potential for harmful advertising. Slimming products, for example, that are not particularly safe, especially for children, are being targeted at children. What more would you like to see this Bill do to tackle some of that? I know the ASA has taken action against some prolific offenders, but what more would you like to see in this Bill to tackle that and keep children safe from adverts that are not marked as such?

Rocio Concha:

To be honest, in this area we do not have any specific proposals. I completely agree with you that this is an area that needs to be tackled, but I do not have a specific proposal for this Bill.

Tim Fassam:

This is an area that we have raised with the Financial Conduct Authority—particularly the trend for financial advice TikTok and adverts for non-traditional investments, such as whisky barrels or wine, which do not meet the standards required by the FCA for other investment products. That is also true of a number of cryptocurrency adverts and formats. We have been working with the FCA to try to identify ways to introduce more consistency in the application of the rule. There has been a welcome expansion by the Treasury on the promotion of high-risk investments, which is now a regulated activity in and of itself.

I go back to my initial point. We do not believe that there is any circumstance in which the FCA would want content in any place taken down where that content should not be removed, because they are the experts in identifying consumer harm in this space.

Martin Lewis:

I still believe that most of this comes down to an issue of policing. The rules are there and are not being enforced strongly enough. The people who have to enforce the rules are not resourced well enough to do that. Therefore, you get people who are able to work around the rules with impunity.

Advertising in the UK, especially online, has been the wild west for a very long time, and it will continue to be so for quite a while. The Advertising Standards Authority is actually better at dealing with the influencer issue, because of course it is primarily strong at dealing with people who listen to the Advertising Standards Authority. It is not very good at dealing with criminal scammers based outside the European Union, who frankly cannot be bothered and will not reply—they are not going to stop—but it is better at dealing with influencers who have a reputation.

We all know it is still extremely fast and loose out there. We need to adequately resource it; putting rules and laws in place is only one step. Resourcing the policing and the execution of those rules and laws is a secondary step, and I have doubts that we will ever quite get there, because resources are always squeezed and put on the back burner.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Thank you. Do I have any questions from Government Back Benchers? No. Does anyone have any further questions?

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport)

Yes, I do. If nobody else has questions, I will have another bite of the cherry.

Photo of Roger Gale Roger Gale Conservative, North Thanet

The Minister is going to come in in a minute.

Photo of Alex Davies-Jones Alex Davies-Jones Shadow Minister (Digital, Culture, Media and Sport)

Q I would just like to query your thoughts on a right to redress for victims. Do you think that having an ombudsman in the Bill would be appropriate, and what would you like to see to support victims of fraud?

Martin Lewis:

As you will know, I had to sue Facebook for defamation, which is a ridiculous thing to do in order to stop scam adverts. I was unable to report the scam adverts to the police, because I had not been scammed—even though it was my face that was in them—and many victims were not willing to come forward. That is a rather bizarre situation, and we got Facebook to put forward £3 million to set up Citizens Advice Scam Action—that is what I settled for, as well as a scam ad reporting tool.

There are two levels here. The problem is who is at fault. Of course, those mainly at fault for scams are the scammers. They are criminals and should be prosecuted, but not enough of them are. You have times when it is the bank’s fault. If a company has not put proper precautions in place, and people have got scammed because it has put up adverts or posts that it should have prevented, they absolutely need to have some responsibility for that. I think you will struggle to have a direct redress system put in place. I would like to see it, but it would be difficult.

It is rather interesting to me that I am worried that the £3 million for Citizens Advice Scam Action, which was at least meant to provide help and support for victims of scams, is going to run out. I have not seen any more money coming from Facebook, Google or any of the other big players out there. If we are not going to fund direct redress, we could at least make sure that they fund a collective form of redress and help for the victims of scams, as a bare minimum. It is very strange that these firms go so quiet on this, and what they say is, “We are doing everything we can.”

From my meetings with these firms—these are meetings with lawyers in the room, so I have to be slightly careful—one of the things that I would warn the Committee about is that they tend to get you in and give you a presentation on all the technological reasons why they cannot stop scam adverts. My answer to them after about 30 seconds, having stopped what was meant to be an hour-long presentation, is, “I have not framed the fact that you need a technological solution. I have said you need a solution. If the answer to stopping scam adverts, and to stopping scams, is that you have to pre-vet every single advert, as old-fashioned media did, and that every advert that you put up has to have been vetted by a human being, so be it. You’re making it a function of technology, but let’s be honest: this is a function of profitability.” We have to look at the profitability of these companies when it comes to redress. What your job is—if you forgive me saying this—is to make sure that it costs them more money to let people be scammed than it does to stop people being scammed. If we solve that, we will have a lot fewer scams on social media and on the search advertising.

Rocio Concha:

I completely agree with everything that Martin says. At the moment, the provisions in the Bill for “priority illegal content” require the platforms to publish reports that say, “This is how much illegal content we are seeing on the platform, and these are the measures that we are going to take.” They are also required to have a way for users to report it and to complain when they think that the platforms are not doing the right thing. At the moment, that does not apply to fraudulent advertising, so you have an opportunity to fix that in the Bill very easily, to at least get the transparency out there. The platform has to say, “We are finding this”—that puts pressure on the platform, because it is there and is also with the regulator—“and these are the measures that we are taking.” That gives us transparency to say, “Are these measures enough?” There should also be an easy way for the user to complain when they think that platforms are not doing the right thing. It is a complex question, but there are many things in the Bill that you can improve in order to improve the situation.

Tim Fassam:

I wonder if it would be useful to give the Committee a case study. Members may be familiar with London Capital & Finance. Now, London Capital & Finance is one of the most significant recent scams. It sold mini-bonds fraudulently, at a very high advertised return, which then collapsed, with individuals losing all their money.

Those individuals were compensated through two vehicles. One was a Government Bill; so, they were compensated by the taxpayer. The others, because they were found to have been given financial advice despite LCF not having advice permissions or operating through a regulated product, went on to the Financial Services Compensation Scheme, which, among others, our members pay for; legitimate financial services companies pay for it. The most recent estimate is over £650 million. The expectation is that that will reach £1 billion at some point over the next few years, in terms of cost to the economy.

LCF was heavily driven by online advertising, and we would argue that the online platforms were in fact probably the only people who could have stopped it happening. They have profited from those adverts and they have not contributed anything to either of those two schemes. We would argue—possibly not for this Bill—that serious consideration should be given to the tech platforms being part of the financial services compensation scheme architecture and contributing to the costs of scams that individuals have fallen foul of, as an additional incentive for them to get on top of this problem.

Martin Lewis:

That is a very important point, but I will just pick up on what Rocio was saying. One of the things that I would like to see, as well as much more rigid requirements of how reporting scams can be put in place—because I cannot see proper pre-vetting happening with these technology companies, but we can at least rely on social policing and reporting of scams. There are many people who recognise a scam, just as there are many people who do not recognise a scam.

However, I also think this is a wonderful opportunity to make sure that the method, the language and the symbols used for reporting scams are universal in the UK, so that whatever site you are on, if you see an advert you click the same symbol, and the process is unified and universal, and works in a very similar way, so that you can report a scam the same way on every site, which makes it simpler, and we can train people in how to do it and we can make the processes work.

Then, of course, we have to make sure that they act on the back of reports, but simply the various ways it is reported, and the complexity, and the number of clicks that you need to make mean it is a lot easier generally to click on an advert than it is to click to report an advert that is a scam. And with so many scams out there, I think there should be a parity of ease between those two factors.

Photo of Caroline Ansell Caroline Ansell Conservative, Eastbourne

Q May I ask, directly related to that, about the complaints procedure? What would you like to see in terms of changes there, to make it more unified, more universal and simpler? It has been suggested that it is not robust enough, not dynamic enough and not fast enough.

Rocio Concha:

There were complaints from the users. At the moment, this Bill will not allow this for fraudulent advertising. So, we need to make sure that it is a requirement for the platforms to allow and to have an easy tool for people to complain and to report when they see something that is fraudulent. At the moment, the Bill does not do that. It is an easy fix; you can do it. And then the user will have that tool. It would also give us transparency for the regulator and for organisations such as ours, to see what is happening and to see what measures the platforms are taking.

Tim Fassam:

I would agree with that. I would also highlight a particular problem that our members have flagged, and we have flagged directly with Meta and Instagram. Within the definition in the Bill of individuals who can raise concern about social media platforms, our members find they fall between two stools, because quite often what is happening is that people are claiming an association with a legitimate firm. So they will have a firm’s logo, or a firm’s web address, in their profile for their social media and then they will not directly claim to be a financial adviser but imply an association with a legitimate financial advice firm. This happens surprisingly frequently.

Our members find it incredibly difficult to get those accounts taken down, because it is not a fraudulent account; that individual is not pretending to be someone else and they are not the individual claiming pretence. They are not directly claiming to be an employee; they could just say they are a fan of the company. And they are not a direct victim of this individual. What happens is that when they report, it goes into a volume algorithm, and only if a very large number of complaints are made does that particular site get taken down. I think that could be expanded to include complaints from individuals affected by the account, rather than directly believing they are pretending to be that.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Mr Lewis, you were nodding.

Martin Lewis:

I was nodding—I was smiling and thinking, “If it makes you feel any better, Tim, I have pictures of me that tell people to invest money that are clearly fake, because I don’t do any adverts, and it still is an absolute pain in the backside for me to get them taken down, having sued Facebook.” So, if your members want to feel any sense of comradeship, they are not alone in this; it is very difficult.

I think the interesting thing is about that volumetric algorithm. Of course, we go back to the fact that these big companies like to err on the side of making money and err away from the side of protecting consumers, because those two, when it comes to scams, are diametrically opposed. The sooner we tidy it up, the better. You could have a process where once there has been a certain number of reports—I absolutely get Tim’s point that in certain cases there is not a big enough volume—the advert is taken down and then the company has to proactively decide to put it back up and effectively say, “We believe this is a valid advert.” Then the system would certainly work better, especially if you bring down the required number of reports. At the moment, I think, there tends to be an erring on the side of, “Keep it up as long as it’s making us money, unless it absolutely goes over the top.”

Many tech experts have shown me adverts with my face in on various social media platforms. They say it would take them less than five minutes to write a program to screen them out, but those adverts continue to appear. We just have to be conscious here that—there is often a move towards self-regulation. Let me be plain, as I am giving evidence. I do not trust any of these companies to have the user and the consumer interest at heart when it comes to their advertising; what they have at heart is their own profits, so if we want to stop them, we have to make this Bill robust enough to stop them, because that is the only way it will stop. Do not rely on them trying to do good, because they are trying to make profit and they will err on the side of that over the side of protecting individuals from scam adverts.

Photo of Kim Leadbeater Kim Leadbeater Labour, Batley and Spen

Q I thank the witnesses for coming. In terms of regulation, I was going to ask whether you believe that Ofcom is the most suitable regulator to operate in this area. You have almost alluded to the fact that you might not. On that basis, should we specify in the Bill a duty for Ofcom to co-operate with other regulators—for example, the Competition and Markets Authority, the Financial Conduct Authority, Action Fraud or whoever else?

Tim Fassam:

I believe that would be helpful. I think Ofcom is the right organisation to manage the relationship with the platforms, because it is going to be much broader than the topics we are talking about in our session, but we do think the FCA, Action Fraud and potentially the CMA should be able to direct, and be very clear with Ofcom, that action needs to be taken. Ofcom should have the ability to ask for things to be reviewed to see whether they break the rules.

The other area where we think action probably needs to be taken is where firms are under investigation, because the Bill assumes it is clear cut whether something is fraud, a scam, a breach of the regulations or not. In some circumstances, that can take six months or a year to establish through investigation. We believe that if, for example, the FCA feels that something is high risk, it should be able to ask Ofcom to suspend an advert, or a firm from advertising, pending an investigation to assess whether it is a breach of the regulation.

Rocio Concha:

I agree that Ofcom is the right regulator, the main regulator, but it needs to work with the other regulators—with the FCA, ASA and CMA—to enforce the Bill effectively. There is another area. Basically, we need to make sure that Ofcom and all the regulators involved have the right resources. When the initial version of the Bill was published, Ofcom got additional resources to enable it to enforce the Bill. But the Bill has increased in scope, because now it includes fraud and fraudulent advertising. We need to make sure that Ofcom has the right resources to enforce the full Bill effectively. That is something that the Government really need to consider.

Martin Lewis:

I was going to make exactly that point, but it has just been made brilliantly so I will not waste your time.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q I thank the witnesses for joining us this afternoon, and particularly Martin Lewis for his campaigning in this area.

I will start by agreeing with the point that Martin Lewis made a minute or two ago—that we cannot trust these companies to work on their own. Mr Lewis, I am not sure whether you have had a chance to go through clause 34, which we inserted into the Bill following your evidence to the Joint Committee last year. It imposes a duty on these companies to take steps and implement systems to

“prevent individuals from encountering content consisting of fraudulent advertisements”.

There is a clear duty to stop them from doing this, rather as you were asking a minute ago when you described the presentation. Does that strong requirement in clause 34, to stop individuals from encountering fraudulent advertisement content, meet the objective that you were asking for last year?

Martin Lewis:

Let me start by saying that I am very grateful that you have put it in there and thankful that the Government have listened to our campaign. What I am about to say is not intended as criticism.

It is very difficult to know how this will work in practice. The issue is all about thresholds. How many scam adverts can we stomach? I still have, daily—even from the platform that I sued, never mind the others—tens of reports directly to me of scam adverts with my face on. Even though there is a promise that we will try to mitigate that, the companies are not doing it. We have to have a legitimate understanding that we are not going to have zero scam adverts on these platforms; unless they were to pre-vet, which I do not think they will, the way they operate means that will not happen.

I am not a lawyer but my concern is that the Bill should make it clear, and that any interpretation of the Bill from Ofcom should be clear, about exactly what threshold of scam adverts is acceptable—we know that they are going to happen—and what threshold is not acceptable. I do not have the expertise to answer your question; I have to rely on your expertise to do that. But I ask the Committee to think properly about what the threshold level should be.

What is and is not acceptable? What counts as “doing everything they can”? They are going to get big lawyers involved if you say there must be zero scam adverts—that is not going to happen. How many scam adverts are acceptable and how many are not? I am so sorry to throw that back as a question when I am a witness, but I do not have the expertise to answer. But that is my concern: I am not 100% convinced of the threshold level that you are setting.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Q Mr Fassam, do you have the answer?

Tim Fassam:

I think we are positive about the actions that have been taken regarding social media; our concern is that the clause is not applied to search and that it excludes paid-for ads that are also user-generated content—promoted tweets or promoted posts, for example. We would ensure that that applied to all paid-for adverts and that it was consistent between social media and search.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q Mr Fassam, I will address those two questions, if I may. Search is covered by clause 35 and user-generated content is subject to the Bill’s general provisions on user-generated content. Included in the scope of that are the priority illegal offences defined in schedule 7. Among those are included, on page 185—not that I expect you to have memorised the Bill—financial services offences that include a number of those offences to do with pretending to carry out regulated financial activity when in fact you are not regulated. Also included are the fraud offences—the various offences under the Fraud Act 2006. Do come back if you think I have this wrong, but I believe that we have search covered in clause 35 and promoted user-generated content covered via schedule 7 page 185.

Tim Fassam:

You absolutely do, but to a weaker standard than in clause 34.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q In clause 35 there is the drafting point that we are looking at. It says “minimise the risk” instead of “prevent”. You are right to point out that drafting issue. In relation to the user-generated stuff, there is a duty on the platforms to proactively stop priority illegal content, as defined in schedule 7. I do take your drafting point on clause 35.

Tim Fassam:

Thank you.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q I want to pick up on Martin Lewis’s point about enforcement. He said that he had to sue Facebook himself, which was no doubt an onerous, painful and costly enterprise—at least costly initially, because hopefully you got your expenses back. Under the Bill, enforcement will fall to Ofcom. The penalties that social media firms could be handed by Ofcom for failing to meet the duties we have discussed include a fine amounting to 10% of global revenue as a maximum, which runs into billions of pounds. Do the witnesses feel that level of sanction—10% of global revenue and ultimately denial of service—is adequately punitive? Will it provide an adequate deterrent to the social media firms that we are considering?

Photo of Roger Gale Roger Gale Conservative, North Thanet

Mr Lewis, as you were named, I think you had better start.

Martin Lewis:

Ten per cent. of the global revenue of a major social media or search player is a lot of money—it certainly would hit them in the pocket. I reiterate my previous point: it is all about the threshold at which that comes in and how rigidly Ofcom is enforcing it. There are very few organisations that have the resources, legally, to take on big institutions of state, regulators and Governments. If any does, it is the gigantic tech firms. Absolutely, 10% of global revenue sounds like a suitable wall to prevent them jumping over. That is the aim, because we want those companies to work for people; we don’t want them to do scam adds. We want them to work well and we want them never to be fined because is no reason to fine them.

The proof of the pudding will be in how robust Ofcom feels it can be, off the back of the Bill, taking those companies on. I go back to needing to understand how many scam ads you permit under the duty to prevent scam ads. It clearly is not zero—you are not going to tell me it is zero. So how many are allowed, what are the protocols that come into place and how quickly do they have to take the ads down? Ultimately, I think that is going to be a decision for Ofcom, but it is the level of stringency that you put on Ofcom in order for it to interpret how it takes that decision that is going to decide whether this works or not.

Rocio Concha:

I completely agree with Martin. Ofcom needs to have the right resources in order to monitor how the platforms are doing that, and it needs to have the right powers. At the moment, Ofcom can ask for information in a number of areas, including fraud, but not advertising. We need to make sure that Ofcom can ask for that information so that it can monitor what the platforms are doing. We need to make sure that it has the right powers and the right resources to enforce the Bill effectively.

Tim Fassam:

You would hope that 10% would certainly be a significant disincentive. Our focus would be on whether companies are contributing to compensating the victims of fraud and scams, and whether they have been brought into the architecture that is utilised to compensate victims of fraud and scams. That would be the right aim in terms of financial consequences for the firms.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q I have one final question that again relates to the question of reporting scams, which I think two or three witnesses have referred to. I will briefly outline the provisions in the Bill that address that. I would like to ask the witnesses if they think those provisions are adequate. First, in clause 18, the Bill imposes on large social media firms an obligation to have a proper complaints procedure so that complaints are not ignored, as appears to happen on a shockingly frequent basis. That is at the level of individual complaints. Of course, if social media firms do not do that, it will be for Ofcom to enforce against them.

Secondly, clauses 140 and 141 contain a procedure for so-called super-complaints, where a body that represents users—it could be Which? or an organisation like it—is able to bring something almost like a class action or group complaint to Ofcom if it thinks a particular social media firm has systemic problems. Will those two clauses address the issue of complaints not being properly handled or, in some cases, not being dealt with at all?

Martin Lewis:

Everything helps. I think the super-complaint point is really important. We must remember that many victims of scams are not so good at complaining and, by the nature of the crossover of individuals, there is a huge mental health issue at stake with scams. There is both the impact on people with mental health issues and the impact on people’s mental health of being scammed, which means that they may not be as robust and up for the fight or for complaining. As long as it works and applies to all the different categories that are repeated here, the super-complaint status is a good measure.

We absolutely need proper reporting lines. I urge you, Minister—I am not sure that this is in the Bill—to standardise this so that we can talk about what someone should do when they report: the same imagery, the same button. With that, people will know what to do. The more we can do that, the easier and better the system will be.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q That is a really important point—you made it earlier—about the complaints process being hidden. Clause 18(2)(c) says that the complaints system must be

“easy to access, easy to use (including by children) and transparent.”

The previous paragraph (b) states that the system must

“provides for appropriate action to be taken by the provider of the service in response to complaints of a relevant kind”.

The Bill is saying that a complaints process must do those two things, because if it does not, Ofcom will be on the company’s back.

Martin Lewis:

I absolutely support all of that. I am just pushing for that tiny bit more leadership, whether it is from you or Ofcom, that comes up with a standardised system with standardised imagery and placing, so that everybody knows that on the top left of the advert you have the button that you click to fill in a form to report it. The more we have that cross-platform and cross-search and cross-social media, the easier it will be for people. I am not sure it is a position for the Bill in itself, but Government leadership would work really well on that.

Tim Fassam:

They are both welcome—the super-complaint and the new complaints process. We want to ensure that we have a system that looks not just at weight of number of complaints, but at the content. In particular, you may find on the super-complaint point that, for example, the firm that a fraudster is pretending to be is the organisation that has the best grasp of the issue, so do not forget about commercial organisations as well as consumer organisations when thinking about who is appropriate to make super-complaints.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q Well, your organisation, as one that represents firms in this space, could in fact be designated as a super-complainant to represent your members, as much as someone like Which? could be designated to represent the man on the street like you or me.

Tim Fassam:

Absolutely. We suggested to Meta when we met them about 18 months ago that we could be a clearing house to identify for them whether they need to take something seriously, because our members have analysed it and consider it to represent a real risk.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Last word to Rocio Concha.

Rocio Concha:

I completely agree about the super-complaint. We as a consumer organisation have super-complaint powers. As with other regulators, we would like to have it in this context as well. We have done many super-complaints representing consumers in particular areas with the regulators, so I think we need it in this Bill as well.

On reporting, I want to clarify something. At the moment, the Bill does not have a requirement for users to complain and report to platforms in relation to fraudulent advertising. It happens for priority illegal content, but our assessment of the Bill is that it is unclear whether it applies to fraudulent advertising. We probably do not have time to look at this now, but we sent you amendments to where we thought the Bill had weaknesses. We agree with you that users should have an easy and transparent way to report illegal or fraudulent advertising, and they should have an easy way to complain about it. At the moment, it is not clear that the Bill will require that for fraudulent advertising.

Photo of Chris Philp Chris Philp The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Q Yes, that is a very good question. Please do write to us about that. Clause 140, on super-complaints, refers to “regulated services”. My very quick, off-the-cuff interpretation is that that would include everything covered and regulated by the Bill. I notice that there is a reference to user-to-user services in clause 18. Do write to us on that point. We would be happy to look at it in detail. Do not take my comment as definitive, because I have only just looked at it in the last 20 seconds.

Rocio Concha:

My comment was in relation not to the super-complaints but to the requirements. We already sent you our comments with suggestions on how you can fix this in the Bill.

Photo of Roger Gale Roger Gale Conservative, North Thanet

Ms Concha and Mr Fassam, thank you very much. Do please write in if you have further comments. Mr Lewis, we are deeply grateful to you. You can now go back to your day job and tell us whether we are going to be worse or better off as a result of the statement today—please don’t answer that now.

Martin Lewis:

I am interviewing the Chancellor in 15 minutes.