Ofcom's Ad Crackdown
Ofcom Mandates Stricter Measures to Combat Scam Advertising on Major Tech Platforms
Key Points
Ofcom will designate 'Category 1' online services as the primary targets for the Fraudulent Advertising Code, with nearly 40 measures to be implemented by these platforms; public consultation is open before final rules are finalized next year.
The regulator says more than £200 million is lost annually to online scams in the UK, underscoring the scale of the problem the code aims to address.
Dedicated reporting channels for scam ads will be set up for trusted organisations, including law enforcement, to speed up removal of fraudulent content.
Real-world examples cited include claims about portable air conditioning units flagged as 'too good to be true' and fake AI-generated images used in political-advertising scams (Nigel Farage imagery), illustrating the kinds of fraud Ofcom is targeting.
The measures will also address criminals who exploit AI to create scam ads and include a plan for proactive detection technology to identify fraudulent ads before they reach users, with a separate consultation later this year.
Ofcom has proposed making it a legal requirement for major tech platforms to ban scam advertisers and prevent repeat offenders from running new accounts. The draft Fraudulent Advertising Code contains nearly 40 measures targeting large services like Facebook, Instagram, YouTube, TikTok, X and Snapchat, according to The Guardian.
The UK regulator says more than £200 million is lost to online scams every year. More than half of all UK adults have encountered a potentially fraudulent ad. Firms that break the new rules could face fines of up to £18 million or 10% of global turnover, whichever is higher.
Nearly 40 Rules Platforms Must Follow to Stop Scam Ads
The proposed code would force platforms to verify that advertisers selling banking or investment products are authorised by the Financial Conduct Authority (FCA). The FCA is the UK's financial watchdog. Platforms would also have to test AI tools designed to catch fraudulent ads before they reach users, Retail Gazette reported.
Dedicated reporting channels would be set up so that law enforcement and other trusted groups can flag scam ads for fast removal. Platforms would also be required to stop banned advertisers from simply opening new accounts to keep running scams, according to Yahoo News Canada.
AI-Generated Fakes and Political Impersonation Drive Urgency
Ofcom pointed to real-world examples to show why the rules are needed. These include fake AI-generated images of Nigel Farage used in political advertising scams and ads for portable air conditioning units flagged as "too good to be true," AOL UK reported.
Criminals are increasingly using AI to create convincing fake ads at scale. A separate consultation on proactive detection technology — tools that catch fraudulent ads before they appear — is planned for later this year. Ofcom says this extra layer is needed to stay ahead of fast-moving fraud tactics.
Big Tech Faces Legal Liability Under the Online Safety Act
The new duties sit inside the Online Safety Act, the UK's landmark internet law. Ofcom will designate so-called "Category 1" services — the largest platforms — as the primary targets. These firms will bear the heaviest responsibilities under the code, according to Market Screener.
Tech firms must "stamp out" scam adverts, Ofcom said. A public consultation on the draft code is now open. Final rules are expected to be confirmed next year. Platforms that fail to comply face penalties reaching up to 10% of their global annual turnover.
£200 Million Lost Each Year as Harm Goes Beyond Money
The financial toll of online scams in the UK runs to more than £200 million every year. But Ofcom stresses the harm goes further than lost money. Victims also suffer serious emotional damage, and the regulator says urgent action is needed to restore trust in digital advertising, The Guardian reported.
UK digital advertising is a multi-billion pound market. With tens of billions of pounds spent online each year, even a small share of fraudulent ads causes widespread harm. Ofcom says the scale of the problem makes the new legal duties unavoidable for big platforms.
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