Google’s corporate motto is “don’t be evil”. But there are few things more evil than making profits destroying people’s lives and refusing to accept responsibility. But that is what Google does. To be fair to Google, the same is true of Facebook, Snapchat, Instagram, Microsoft Bing, and other internet platforms. They take money from fraudsters and criminals to advertise them to and put them in contact with innocent users, who become victims, sometimes losing their life savings. The internet companies refuse to accept meaningful responsibility for it, for example refusing to compensate their users who they have turned into fraud victims.
I have been working hard with the Treasury Select Committee on a landmark report in economic crime, which we publish this week. Economic crime ranges from fraud, to terrorist financing and money laundering – hiding the criminal gains of international drug lords, oligarchs and dictators. In total, economic crime in the UK is now more common than all other crimes combined, and is thought to total at least £100bn a year in value. Although it is the most common crime, police spend less than 1% of their time on it – they are trained to solve crimes where you can see the object that is stolen and can take physical fingerprints.
Fraud has become so common because of the rise of the internet and mobile telephony, which has made it far easier for criminals to identify and contact users. It is a bigger issue for the UK than other countries because we are wealthy economy with a global financial centre, we have high take up of internet services, are internationally open and use English, making it easier for international criminals to target us (many of the fraudsters are based overseas). It has not been clamped down on because our regulation and legislation has not kept pace with technological change, but also because of the attitudes of the internet firms. They have long insisted they are neutral platforms with no responsibility for the content they promote (this is changing), and also want a “frictionless” business model which means, for example, they automatically take adverts rather than check who is paying for them.
It does not have to be like this. Under UK law, you are only allowed to advertise certain financial products, such as investment trusts, if you are authorised by the regulator, the Financial Conduct Authority. The internet firms insisted this didn’t apply to them, so they actively promoted financial scams. After we put it under pressure, a few month ago Google started requiring that any financial promotions it advertises should only be from authorised firms. The number of investment scams that Google promoted dropped instantly by at least 90% (although other scams continue). Facebook, Instagram and Microsoft have said they will do the same, but have given no date for it.
If you open a bank account, the bank will do checks on you to make sure they know who you are, and that you are not a fraudster. But internet firms do no such checks on those who advertise with them, meaning that Google and Facebook would happily take money from Al Capone to advertise his services, without even knowing they are doing it. That needs to change. Mobile phone operators need to stop sending the bulk texts from fraudsters, which is easy for them to do.
If you are a victim of fraud, you should normally be compensated by your bank. That scheme is not voluntary, and not perfect, and it is good that the Government is legislating to make it better for victims. But internet companies should also be part of the scheme. At the moment, they refuse to compensate victims, so they profit from promoting fraud and pay none of the costs, giving them a perverse financial incentive to continue promoting fraud. When I grilled them on this, they blustered about wanting to eliminate all fraud, but until that happens, what about the victims they continue to create?
There are many other things the Government needs to do, from reforming company law to stop money launderers setting up shell companies, to creating a register of beneficial owners to stop London’s property market being used as a giant laundromat for global criminal money. Law enforcement needs to be stepped up. Ultimately, all this needs to be put in a new economic crime bill. We will then start to turn the tide on this tsunami of scams that is making so many people’s lives a misery.