HomeInsightsGovernment announces changes to Online Safety Bill to tackle scams and fraud

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Social media sites and search engines will be forced to stamp out fraudsters and scammers on their platforms as the government strengthens its internet safety laws. The Government has also launched a consultation on how online advertising is regulated in the UK, which includes proposals to improve transparency and accountability and tackle harmful, fraudulent and misleading adverts (see here).

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, including “catfishing” romance scams and fake stock market tips, posted by people in images, comments or videos.

The Government is now adding a new duty to the Bill that will bring fraudulent paid-for adverts on social media and search engines into scope, whether they are controlled by the platform itself or an advertising intermediary.

These companies will have to put in place proportionate systems and processes to prevent (or, in the case of search engines, minimise) the publication and/or hosting of fraudulent advertising on their service and remove it when they are made aware of it. Companies will have to therefore clamp down on ads with unlicensed financial promotions, fraudsters impersonating legitimate businesses and ads for fake companies. It also includes “boosted” social media posts by users who pay to have them promoted more widely.

The regulator Ofcom will set out further details on what platforms will need to do to fulfil their new duty in Codes of Practice. This could include: (i) making firms scan for scam adverts before they are uploaded to their systems; (ii) measures to check the identity of those who wish to publish advertisements; and (iii) ensuring financial promotions are only made by firms authorised by the Financial Conduct Authority.

Ofcom will oversee whether companies have adequate measures in place to fulfil the duty, but will not assess individual pieces of content, in keeping with the approach taken in the rest of the Bill. It will have the power to hold companies to account by blocking their services in the UK or issuing heavy fines of up to £18 million or ten per cent of annual turnover. To read the Government’s announcement in full, click here.