Every day, paid advertisements on social media direct people into sophisticated fraud operations, including fake investment schemes, impersonation scams and other forms of online fraud.

Victims can lose their savings, pensions and financial security after being reached through advertising systems operated by platforms they use every day. The damage does not end with the financial loss. Fraud victimisation can cause severe psychological distress, loss of confidence and lasting damage to personal and financial wellbeing.

At the same time, platforms earn advertising revenue from delivering these advertisements to users.

When an advertising campaign is subsequently established to have been fraudulent, there is currently no general EU mechanism requiring the platform to surrender the revenue it earned from delivering that campaign.

We believe that must change

A platform should not be allowed to retain revenue attributable to advertising campaigns that are subsequently established to have been fraudulent. That gain should be surrendered under a transparent legal mechanism and used to support victim redress and recovery.

This is not the same as simply dividing regulatory fines among victims. Punishment, removal of the financial gain and compensation of victims perform different functions and should be addressed through separate legal mechanisms.

Punish the infringement. Remove the profit. Repair the harm

Europe has promised effective consumer protection online for more than twenty-five years

This is not a new policy demand.

For more than a quarter of a century, the European Union has repeatedly promised that technological change should not reduce consumer protection. In 1999, the Council called for an equivalent level of protection for new technologies to that available in traditional consumer transactions. In 2007, the Commission said consumers should be equally effectively protected whether shopping in a local store or online. Later EU strategies repeatedly reaffirmed the same principle, including comparable protection and fairness online and offline and the commitment that digital transformation should not entail a regression of rights.

Yet that promise is still not being met in online fraud.

The benefits of digitalisation accrue throughout the platform and financial ecosystem, while a disproportionate share of the losses and the burden of recovering them remains with the consumers whom the Union promised to protect. EFRI’s policy proposal documents this gap and sets out a concrete redress and recovery mechanism. 

What we are asking the European Union to do

We call on the European Commission, the European Parliament and the Council of the European Union to establish a European framework that:

1. Requires platforms to surrender the gain attributable to advertising campaigns subsequently established to have been fraudulent.
2. Directs the surrendered gain towards victim redress and recovery, rather than allowing revenue generated by fraudulent advertising to remain with the intermediary that earned it.
3. Creates a European Fraud Victim Redress and Recovery Fund that can reimburse documented victims within a statutory cap and then pursue recovery from offenders and legally responsible intermediaries. The fund would then pursue recovery from offenders and legally responsible intermediaries, so that the litigation and recovery burden moves from individual victims to a professional mechanism.
4. Provides a non-commercial route for financing recovery and representative actions in complex cross-border online-fraud cases where conventional third-party litigation funding is unavailable, uneconomic or would absorb a substantial share of victims’ recoveries.
5. Measures enforcement by victim outcomes, including the amount actually returned to victims and the time required to return it, rather than measuring success only through investigations, fines and confiscations.

EFRI’s proposal separates three functions that are too often confused today: a fine punishes an infringement, disgorgement removes the financial gain, and redress repairs the harm suffered by victims.

Why a European Redress and Recovery Fund is needed

Online fraud is cross-border by design. Victims, platforms, receiving banks, payment institutions, crypto-asset providers and fraud operators may all be located in different countries.

Money moves within seconds. Evidence and cross-border legal requests can take months.

Even when authorities investigate, impose sanctions or recover assets, no single institution is responsible for ensuring that victims actually receive compensation.

EFRI therefore proposes a pay first, recover after model. Eligible victims would receive bounded redress based on their documented net loss. 

The Fund must never become a licence fee for fraud enablers. No fine, contribution or disgorgement payment should release an intermediary from legal liability or weaken victims’ individual or collective rights. 

Want to see how this could work in practice?

EFRI has developed a detailed five-page policy briefing setting out how a European Fraud Victim Redress and Recovery Fund could operate, including victim eligibility, calculation of documented losses, recovery from those responsible, financing from qualifying sanctions and disgorged revenue, and funding for cross-border representative actions.

[Read EFRI’s five-page proposal: From Enforcement to Redress — and from Redress to Recovery]

The proposal forms part of EFRI’s continuing policy work and will be kept updated as the European legal and policy framework develops.

EFRI is a qualified entity under Directive (EU) 2020/1828, designated in Austria. 

Sign the petition

Sign this petition if you agree that enforcement against online fraud should be measured not only by the fines imposed, but by whether victims actually get their money back.

Punish the infringement. Remove the profit. Repair the harm.