Fraudulent advertising brought into scope of Online Safety Bill

The government included fraudulent advertising within the scope of the Online Safety Bill when the Bill was introduced into Parliament in March 2022¹. The change followed campaigning by Which? and others, and forms part of the wider regulation-policy landscape covering online harms and advertising.

Which? and Demos Consulting spent 12 months examining investment advertising on Meta platforms, including Facebook and Instagram, using Meta's public Ad Library¹. Between October 2021 and August 2022 they collected and analysed 6,357 adverts shown to Meta platform users in the UK, of which a sample of 1,064 were manually coded¹. Within the coded sample, 484 adverts were judged to be offering something related to investment: 259 were identified as offering an investment product and 240 an investment service, with 15 appearing to offer both¹.

The report set out the categories of investment product advertised in the sample:

Adverts where the nature of the product was unclear accounted for 12% of products advertised, described as the third largest category in the sample¹. Which? also reported finding three adverts for binary options, which it described as "a form of trading banned in the UK in 2019"¹. The report cited UK consumers losing £160.7m to these scams between January and August 2022¹.

On platform policy, the report noted that "Meta announced in December 2021 that it intends to prevent firms which are not registered with the FCA from advertising financial services and products on its platforms"¹. It also stated that "Nearly one in ten adults in the UK have been a victim of fraud"¹.

Why it matters for households

Bringing fraudulent advertising into the Bill's scope means paid-for adverts that amount to fraud fall within the online safety regime rather than sitting outside it, a change that took effect at the Bill's introduction in March 2022¹. The research behind the change looked specifically at investment adverts, a category associated with significant financial losses, and found that a quarter (25%) of product adverts in the sample came from a single category, property management or advice¹. For households, the practical effect is that the advertising that carries investment scams is the same advertising that platforms approve and display, and the report found examples including adverts for binary options, banned in the UK since 2019¹. The report also recorded that victims lost £2.6bn to fraud in 2021 and that Which? estimated the harm from lost wellbeing attributable to online scams at £7.2 billion a year¹. The Take Five and Stop! Think Fraud campaigns and the wider scams and fraud guidance cover how consumers are urged to respond to approaches of this kind.

What happens next

The report called for the Online Safety Bill to be passed into law without delay, and for further legislation to tackle misleading and scam adverts across the rest of the web through the Online Advertising Programme¹. It also recommended that platforms and ad tech companies work with the Financial Conduct Authority and other stakeholders, and that stronger due diligence processes require advertising companies to know who is buying space on their platforms¹. The report was published in December 2022¹. No further dates for the Bill's passage or for the Online Advertising Programme are given in the report.