Government takes aim at scam adverts with changes to Online Safety Bill

A new legal duty will be added to the Online Safety Bill which will require social media sites and search engines to stop paid-for fraudulent adverts appearing on their services.

These companies will need to have the correct systems and processes to prevent the publication and hosting of fraudulent advertising, and remove it when they are made aware of it. This will require clamping down on ads with unlicensed financial promotions, fraudsters impersonating legitimate business, and ads for fake companies.

These ads can have devastating impacts, namely where criminals impersonate celebrities or companies to steal people’s personal data, peddle dodgy financial investments, or break into bank accounts.

Ofcom will set out further details of their new duty in codes of practice, which could include scans for scams before uploading an advert, identity checks of advertisers, and ensuring fincial promotions are only made by firms registered with the Financial Conduct Authority (FCA). Ofcom will have the power to hold companies to account by blocking their services in the UK or imposing fines of up to £18 million or 10% of annual turnover.

This comes as the government also launches a consultation as part of a wider overhaul of online advertisement regulation which aims to boost people’s trust in being online by making sure the UK’s rules and regulations keep pace with rapid advances in technology so they can tackle harmful, fraudulent activity.

Under new plans within the consultation, harmful or misleading adverts, such as those promoting negative body images, and adverts for illegal activities such as weapons sales, could be subject to tougher rules and sanctions. Influencers failing to declare they are being paid to promote products on social media could also be subject to stronger penalties.

The consultation will look at the current regulations and regulators and consider their current empowerment and funding. Options include strengthening the current self-regulation approach or creating a new statutory regulator with tough enforcement powers including rule-making powers, increased scrutiny across the supply-chain related to high-risk advertising, and increased investigatory powers.

Culture secretary Nadine Dorries said:

“We want to protect people from online scams and have heard the calls to strengthen our new internet safety laws. These changes to the upcoming Online Safety bill will help stop fraudsters conning people out of their hard-earned cash using fake online adverts.

As technology revolutionises more and more of our lives the law must keep up. Today we are also announcing a review of the wider rules around online advertising to make sure industry practices are accountable, transparent and ethical – so people can trust what they see advertised and know fact from fiction.”

David Postings, Chief Executive of UK Finance, said:

“We strongly welcome the government’s announcement that it will expand the scope of the Online Safety Bill to include advertising on social media and search engines. UK Finance, alongside a number of other bodies, has long been calling for the government to make this change.

This is particularly important given we know the majority of authorised push payment fraud starts online and that criminals often post fake adverts to try and trick victims.

The banking and finance industry is leading the fight against fraud, but the scale of the threat means it’s vital that all sectors, including online firms, do more to help protect the public. We look forward to working with the government and tech companies, including through the Online Fraud Steering Group, on further measures to tackle economic crime.”