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A committee of MPs has urged tech giants such as Google, Facebook, and Microsoft to stop the ‘immoral’ practice of profiting from the EUR 11.7 billion of pension fraud committed by internet scammers.
Fraudsters use online advertisements to trick people out of their pension funds, according to a report published by the work and pensions select committee, but regulators are powerless to hold the internet companies to account.
According to the report, after accepting payment for the ads from criminals, the tech companies then make more money by hosting public warnings about the scams from regulators such as the Financial Conduct Authority.
During its inquiry, the committee heard evidence from the Pension Scams Industry Group that 40,000 people had been defrauded of EUR 11.7 since 2015.
The MPs say internet companies should be covered by legislation that already forces newspapers and broadcasters to vet financial adverts or face legal liability.
Fraud accounts for a third of reported crime but less than 1% of police resources are spent on investigating it. Enforcement is splintered between the police and seven regulators. The MPs called for a dedicated Pension scams centre to manage an intelligence database and enforce the law.
Younger fraud victims often suffer a double whammy of losing their pension funds, then facing large tax bills on the money they have lost, the report says.
People who access their pension fund before the age of 55 must pay charges that can amount to half the value of the fund. As a result, some victims never report the crime for fear of tax penalties, the report says.
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