Government to act against paid-for scam ads online

Mar 16, 2022 12:00:00 AM

What has happened?

In March 2022, the UK Government announced a crackdown on paid-for internet scam advertisements, as part of its wider overhaul of online advertising regulations. It is intended that tougher laws will force social media sites and search engines to remove fraudsters and scammers from their platforms.

What do you need to do?

The Government has launched a consultation as part of a wider overhaul of how online advertising is regulated in the UK, which includes proposals to improve transparency and accountability and to tackle harmful, fraudulent and misleading adverts.

Under the current draft of the Online Safety Bill, search engines and platforms that host user-generated content, video sharing or live streaming will have a duty of care to protect users of their services from fraud committed by other users, such as fake investment tips posted in images, comments or videos.

On 8 March, the Government added a new duty to the Bill. This will bring fraudulent paid-for adverts on social media and search engines into the Bill’s scope, whether they are controlled by the platform itself or by an advertising intermediary. Platforms will be required to put in place “proportionate systems and processes” to prevent or minimise the publication and hosting of fraudulent advertising and to remove it when they are made aware of it. It will mean platforms will have to clamp down on unlicensed financial promotions, fraudsters impersonating legitimate businesses and promotions for fake companies.

The telecoms regulator Ofcom will set out further details in codes of practice on what platforms will need to do to fulfil their new duty. This could include making firms scan for scam adverts before they are uploaded to their systems, measures such as checking the identity of those who wish to publish advertisements, and ensuring financial promotions are made only by firms authorised by the FCA.

How can we help you with financial promotions compliance?

If you’d like to know more about how we can help you with your financial promotions compliance arrangements, or with any other regulatory compliance issues, our specialist team is here to help.

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