Much to the relief of the insurance industry, Government has announced this week that social media sites and search engines will be forced to stamp out fraudsters and scammers on their platforms, with measures set to be introduced to the Online Safety Bill to help tackle fraudulent and misleading adverts.
Keoghs has for some time campaigned for serious measures to be taken by Government to tackle the prevalence of fake adverts on search engines – one of the fastest growing aspects of online fraud. These fraudulent adverts have a significant knock-on effect on claimants and the insurance industry.
When a scammer impersonates an insurer in the aftermath of a road traffic accident, they are able to put claimants in costly credit hire vehicles, and provide a range of other ‘claims services’ at hugely-inflated cost, with major consequences for consumers’ insurance premiums.
Tackling this issue at present is difficult, complicated and long-winded. Insurers must currently negotiate with search engines to remove the offending ads on an individual basis, however in the process of doing so dozens of others spring up to take its place.
With a new legal duty to be added to the Online Safety Bill, requiring the largest and most popular social media platforms and search engines to prevent paid-for fraudulent adverts appearing on their services, the hope will be that it will become far more difficult for fraudsters to game the advertising system.
The exact wording of the measures to be including within the Online Safety Bill has yet to be seen. However, in order for these measures to have the teeth required to tackle the full force of this problem, it is very important that careful drafting takes place.
We provided detailed feedback to the Joint Committee scrutinising the Bill in November of last year, including our suggestions for wording that could be included within the Bill to tackle this issue.
A Law Commission report in July 2021 had previously made recommendations for amendments to existing legislation which could combat the problem of online communications sent with the intention to cause psychological harm, and we understand that this wording was being used to form the basis of initial drafting for measures to tackle fraudulent or misleading adverts. In our observations to the Joint Committee we suggested the word ‘harm’ could be interpreted in different ways, leading to the potential for satellite litigation, and that consideration should be given to consumers suffering financial harm, as well as psychological harm, as a result of being on the receiving end of fraudsters’ attentions.
The updated Bill wording is forecast to be published around Easter.
As well as announcing these additional measures to be included in the Bill, the Government has also launched a consultation as part of a wider overhaul of how online advertising is regulated in the UK, which includes proposals to improve transparency and accountability and tackle harmful, fraudulent and misleading adverts.
The consultation closes on 1 June 2022 and provides additional information on how Ofcom will set out further details on how online search engines and social media sites can meet their duties (under the new measures contained in the Online Safety Bill) in codes of practice. The consultation itself is focussed on the future regulation of online advertising and on the impact of harmful adverts such as those which portray a negative body image or sell harmful or illegal products.
Head of Market Affairs
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