Social media platforms and search engines are to be forced to tackle fraudulent advertisements, according to the government.
The duty will be included in an updated version of the Online Safety Bill which Sky News understands may arrive as early as next week.
It follows criticisms of a previous draft of the law covering harmful user-generated posts but not harmful adverts and promotions.
New online advertising programme
At the same time as announcing the amendment to the Online Safety Bill the government has launched a consultation over the rules for the online advertising industry.
According to the government the existing regulations have not been able to able to keep up with “rapid technological developments” in the industry, “leading to an increase in consumer harm”.
It could result in a new online advertising regulator with the ability to block and ban advertisers that repeatedly break the rules.
Failing to tackle scam adverts
Legally, the changes will require companies “to put in place proportionate systems and processes to prevent (or minimise in the case of search engines) the publication and/or hosting of fraudulent advertising on their service” and to be able to remove the ads when they are made aware of them.
The government will leave it to the Online Safety regulator Ofcom to decide whether the systems and processes are proportionate.
The update follows a report by the treasury committee accusing the government of failing to tackle an alarming growth in fraud across the country.
The MPs suggested that online companies including Meta and Google should pay compensation to people who were duped by scams advertised through their platforms.
Instead of paying compensation, however, the MPs noted the companies were receiving additional advertising money from the public purse to warn about these scams.
The Financial Conduct Authority paid more than £1.1m to companies including Google, Twitter, TikTok and Meta to run anti-scam adverts between 2019 and 2021.
Google has since offered the regulator $3m (£2.2m) in free advertising credits in a move which the MPs said should be copied by the other platforms.
Martin Lewis, the founder of MoneySavingExpert, previously settled a lawsuit against Facebook for running fraudulent ads featuring his name and image.
He said he was thankful that the government “listened to me and the huge numbers of other campaigners… who’ve been desperate to ensure scam adverts are covered by the Online Safety Bill”.
“Now we and others need to analyse all elements of this new part of the bill, and work with government and parliament to close down the hiding places or gaps scammers can exploit,” he added.
Protecting the industry
The UK is the largest market in Europe for advertising, and the fourth largest in the world by advertising spend – with the total industry turnover in 2019 reaching an estimated £40 billion.
But it has been “easy for fraudsters” to place rogue adverts online because the tech companies have not been legally required to verify advertisers’ backgrounds, MPs said.
Alongside the announcement, 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,” added Ms Dorries.
“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.”