Online platforms ‘must compensate fraud victims for hosting fake sites’

ONLINE platforms that host fake websites as part of investment scams should be forced to compensate victims of fraudsters.

Sinn Féin spokesperson on Finance Pearse Doherty has also called for measures to be introduced by banks and other payment providers so that the credentials of those getting large payments can be cross-checked.

Mr Doherty said this “confirmation of payee” system has been introduced successfully in Britain and the Netherlands to reduce fraud.

He was responding to the surge in sophisticated scams in which fraudsters are seeking investments of upwards of €20,000.

Fraudsters are targeting the over-55s with elaborate cons, claiming to be part of reputable investment firms and swindling people, often out their life savings.

The Banking and Payments Federation Ireland’s Fraud-Smart group has warned customers that con artists are replicating brochures, using the names and branding of recognised legitimate bonds and investment schemes and circulating them online.

The rise in highly convincing investment scams that are robbing people of millions of euro was a wake-up call for action, Mr Doherty said.

“These scams are being advertised online, on social media and by email.

“We need to ask when online platforms and social media companies will take responsibility for the fraudulent content that is being advertised on their platforms and robbing citizens of thousands of euro.”

He said there is no requirement for online platforms and social media companies to pay compensation to victims of fraud, but that needs to change.

“There is also no requirement for payment service providers to pay compensation to victims of authorised push-payment fraud.”

Push payment fraud is a scam that involves the fraudster tricking their victims into willingly making large bank transfers to them.

Mr Doherty said there is no system in this country to cross-check the name of the person victims send their money to against the name on the actual account.

“This is called confirmation of payee and has been introduced successfully in Britain and the Netherlands to reduce fraud.

“These are actions that can be introduced to protect potential victims of scams and fraud.

“It is time to give this issue the attention it deserves.”

bombarding over-55s with phone calls, emails and text messages offering them investment opportunities, which are bogus.

Niamh Davenport, head of financial crime with the Banking and Payments Federation, warned consumers of a rise in serious investment scams that appear to be legitimate but are not.

“In recent months, Fraud-Smart members have noticed a rise in very serious and elaborate investment scams and the numbers are continuing to increase,” she said.

“The fraudsters hide behind websites, including product comparison websites that appear to be legitimate, and also make contact via cold calling, unsolicited emails, social media and text messages.”

The Irish Independent has alerted the Central Bank after obtaining brochures purporting to come from Goldman Sachs and Citibank and promising high returns.

The documents look legitimate and are produced to a very high standard, but are fakes.

Ms Davenport said initial indications suggested the scams were particularly targeted at those in the over-55 age bracket, with a minimum investment of €20,000.