The child financial harm epidemic: our call to action for policymakers, regulators and industry

Over the past three years, Parent Zone has led a consortium, funded by Nominet, looking at Child Financial Harms. These harms are largely overlooked despite fuelling an alarming increase in criminal exploitation, fraud and a wide range of legal but harmful risks to children. The scale of the issue is vastly underestimated.

Working with experts from UK Finance, Cifas, the PSHE Association, the University of York, and Reason Digital, we have shown that there is an epidemic of finance-related harms to children.

Many of these harms have become normalised for children, including accepting being scammed as the “price of being online”. According to the Internet Watch Foundation (IWF), sexual extortion of children has increased by 72%, and AI is accelerating the risks.

Despite a lack of public awareness, the majority of families in the UK tell us it is a recurrent and pervasive issue. Six in 10 parents agree that it is a relevant issue that needs to be addressed, but they are being left to deal with the consequences with little support.

If we are to tackle child financial harm, collective action is needed now.

The recent fraud strategy and the consultation on under-16s social media access provide opportunities to recognise child financial harms and tackle the root causes of many of the harms families are concerned about.

Parent Zone, Cifas and The PSHE Association are calling on government, regulators and industry to commit to six clear steps that need to be taken if we are to protect children.

A call to action: our six-step plan to protect children

The Child Financial Harms programme has finished, but the risks to children remain. We have sent a six-step plan to 30+ MPs to ensure our findings lead to real change. It is time for the government to act.

The Child Financial Harms consortium is calling on the government for the following measures:

1. The Department for Science, Innovation and Technology (DSIT) must establish an expert task force to maintain and build on the work that has begun. 

   The task force should have a remit to develop an action plan to halve child financial harms before the end of this Parliament. This should include commitments to continuing to map and build the evidence base, responding to gaps and sustaining cross-sector implementation of the plan.

   Alongside this urgent, strategic government action, regulators and industry must acknowledge their role and use their power to take the practical steps needed to protect children:

2. The Home Office must ensure that measures to tackle child financial harms, with specific plans and targets, are a core part of its implementation of the UK Fraud Strategy.
3. The new statutory RSHE guidance must introduce additional financial harm content to the curriculum. DfE must enable successful implementation by supporting experts in the sector to provide evidence-based training, guidance and resources for teachers on the specifics of the issue.
4. The Secretary of State for DSIT must make tackling online child financial harms a strategic priority for the regulator Ofcom to address.
5. Ofcom must hold platforms accountable for the financial harms they facilitate – and take swift action when platforms fail – including restricting access to ancillary services where required.
6. Banks and payment providers must introduce measures to identify purchases made by children and add additional appropriate protections. 

Keep up with our work around Child Financial Harms. 

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