The UK Government has announced a new legal duty under the Online Safety Bill, requiring major social media platforms and search engines to prevent fraudulent paid ads from appearing on their services.
An earlier version of the Online Safety Bill fell short of expectations for banks, regulators, and advocacy organizations, as it aimed to address only user-generated scams, excluding paid advertisements. This upcoming change is expected to enhance protections for internet users against the harmful effects of fake ads, including scams where criminals impersonate celebrities or legitimate businesses to steal personal data, promote dubious financial investments, or hack into bank accounts.
Security Minister Damian Hinds emphasized that this change mandates online and social media companies to recognize the severity of these issues and to take substantial action against online fraud. He stressed the importance of protecting innocent victims from exploitation and deception by fraudsters.
Ofcom, the regulator, will provide further guidance on the obligations platforms will have under this new duty through codes of practice. This could entail requiring companies to scan for scam adverts before they go live, verifying the identities of those wishing to publish ads, and ensuring that financial promotions are only issued by firms authorized by the Financial Conduct Authority (FCA).
David Postings, the chief executive of UK Finance, welcomed the government’s decision, stating, “We strongly support the announcement to expand the Online Safety Bill to include advertising on social media and search engines. UK Finance, along with several other organizations, has been advocating for this change.”
Additionally, the government is initiating a consultation to explore tightening regulations in the online advertising industry. This initiative aims to encompass more of the key players under regulation, fostering a more transparent, accountable, and safer advertising market.