The government has officially responded to a question from the opposition about the level of fraud in the peer-to-peer lending sector.
In response to a question from Labour’s shadow minister for digital, culture, media and sport, Alex Sobel, John Glen, the economic secretary to the Treasury, said that “the government takes matters of fraud extremely seriously.”
In a written statement, Glen said that the government will “continue to work closely with industry to close down the vulnerabilities that fraudsters exploit and ensure members of the public have the information they need to spot a scam and stand up to fraudsters.”
“We set up the Joint Fraud Taskforce to help build a collaborative law enforcement, government and industry response to tackling fraud,” Glen added.
“The Taskforce have already delivered on initiatives such as Take Five (the fraud awareness campaign). The Financial Conduct Authority’s (FCA) ScamSmart website also aims to help consumers protect themselves against investment scams, by allowing users to search a warning list to check an investment opportunity and report scams or unauthorised firms.
“The FCA has a broad range of powers to oversee the P2P and parts of the crowdfunding sectors. Moreover, P2P lending and investment-based crowdfunding are regulated activities under Financial Services Markets Act
“HM Treasury works closely with the FCA on an ongoing basis to understand what risks it has identified in the sectors it regulates, including the potential for an increase in fraud.”
On 11 January, Sobel asked whether the government plans to make an assessment of the potential level of fraud in P2P lending and crowdfunding.
While he did not name any P2P lenders in particular, there have been some claims of fraud during the administrations of collapsed P2P lenders such as Lendy and FundingSecure.