The UK plans to force Google, Facebook, Twitter and other online platforms to prevent paid-for fraudulent advertisements, following calls from regulators and consumer groups for a stronger crackdown on scams.
The government said its draft law on preventing online harm would require social media and search engines to better protect users from romance scams, dodgy financial investment tips and criminals impersonating celebrities or companies to steal personal data or break into bank accounts.
Communications regulator Ofcom will check if platforms have put in place systems to prevent and remove fake ads. The watchdog could block services or issue a fine of up to 18 million pounds (€21.6 million) or 10 per cent of annual turnover, the government said.
Online scams from advertisements on social media mushroomed as more people went online during lockdowns to fight COVID-19.
A British record of 754 million pounds (€904 million) was stolen in the first six months of 2021 in banking scams, up by almost a third from the same period in 2020, according to data from UK Finance, a banking industry body.
Crackdown on harmful or misleading ads
In response to pressure from the Financial Conduct Authority (FCA), some online services are limiting ads for financial products to companies regulated by the FCA, which has called for stronger powers.
"This could make a huge difference to stemming the tide of fake and fraudulent ads on social media and search engines which cause devastating financial and emotional harm to innocent victims," said Anabel Hoult, chief executive of consumer campaign group Which?
The government said it was also launching a public consultation on tightening rules for the online advertising industry, either by strengthening the current self-regulation approach or by creating a new watchdog.
This could mean tougher rules and sanctions to crack down on harmful or misleading ads, such as those promoting negative body images or promoting illegal activities such as weapons sales.
Influencers failing to declare they are being paid to promote products on social media could also be subject to stronger penalties, the government said.