The House of Commons Digital, Culture, Media and Sport Committee questioned Ofcom Chief Executive Dame Melanie Dawes and Chair Sir Ian Cheshire on 20 October about the regulator’s performance and expanding responsibilities, with online safety and enforcement forming a major part of the discussion. The session is particularly relevant following Ofcom’s recent consultation on its proposed Fraudulent Advertising Codes of Practice, which will determine how major online services are expected to prevent and tackle fraudulent advertising.
For insurers, a key issue is whether Ofcom will have the regulatory tools, resources and capacity to ensure the forthcoming Codes translate into effective action, particularly against paid ad spoofing, where consumers searching online for an insurer or claims contact can instead be diverted by misleading paid advertisements.
MPs repeatedly questioned whether Ofcom has sufficiently effective tools to intervene quickly against online harms. Sir Ian Cheshire acknowledged limitations in the existing framework, while Ofcom advocated improved interim business disruption measures, similar in effect to injunctions, which could enable earlier intervention while longer enforcement processes continue.
This has clear relevance to fraudulent advertising. A misleading advert can divert consumers before conventional reporting, investigation and appeals processes have concluded. For insurers experiencing repeated impersonation, effective enforcement also needs to address linked accounts, domains and repeat offenders, rather than simply removing individual adverts as they appear.
The Committee also challenged Ofcom on whether it has the resources, skills and capabilities required for its significantly expanded remit.
Dame Melanie acknowledged the heavy workload and need for greater resources in implementing new online safety measures, while Sir Ian highlighted the difficulties of regulating global technology companies with significantly greater legal resources.
This will be important as the Fraudulent Advertising Codes move towards implementation. Strong rules will only be effective if Ofcom has sufficient capacity to supervise compliance and intervene promptly where platform systems repeatedly fail.
The speed of Ofcom's regulatory and enforcement response was a recurring theme. Ofcom stressed the importance of robust processes, particularly given the prospect of legal challenge, but acknowledged the challenge of meeting expectations for faster intervention.
That tension is particularly significant for fraudulent advertising. Fraudsters can quickly change accounts, websites and other infrastructure. Keoghs' response to Ofcom’s recent consultation therefore called for defined expectations for urgent reports and removal, preventative action against high-risk advertising and rapid intervention where provider systems repeatedly fail.
The effectiveness of the regime should ultimately be measured by whether fraudulent activity is prevented and disrupted, rather than simply whether platforms have compliant processes in place.
The Committee also discussed the use of AI and technology to improve regulatory efficiency and detect illegal content.
For fraudulent advertising, platforms hold information that individual insurers and consumers cannot see, including account histories and connections between accounts. This could help providers identify common infrastructure and the reappearance of previously disrupted campaigns.
For paid ad spoofing, preventative detection is particularly important. Identifying an unauthorised advertiser using an insurer's name, branding or claims terminology before an advert reaches consumers could significantly reduce harm.
Although fraudulent advertising was not itself a principal focus of the hearing, the discussion highlighted three issues that will be central to the effectiveness of Ofcom’s forthcoming Codes:
Attention now turns to Ofcom’s consideration of responses to the Fraudulent Advertising Codes consultation and the final shape of the regime.
For insurers, the Parliamentary session reinforces the importance of monitoring not only what obligations the final Codes impose on platforms, but whether Ofcom has the resources and enforcement tools necessary to make those obligations effective in practice.
Keoghs will continue to engage with Ofcom and industry stakeholders as the regime develops, with a particular focus on paid ad spoofing, insurer impersonation and repeat fraudulent advertising.
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