Ofcom Unveils Draft Fraudulent Advertising Code, Putting Legal Pressure on Social Media and Search Giants #

UK communications regulator Ofcom has published a draft Fraudulent Advertising Code that would, for the first time, make major technology platforms legally responsible for detecting and removing paid scam advertisements on their services. The proposals, announced on 10 July 2026, form part of the continuing implementation of the Online Safety Act and apply to the UK’s most widely used social media and search platforms, including Facebook, Instagram, TikTok, YouTube, Pinterest and Reddit.

The draft code sets out close to 40 specific measures that Category 1 and Category 2A services would be required to adopt. Among the key expectations are a “one strike and you’re out” approach to banning accounts that publish fraudulent ads, as well as measures to prevent banned actors from creating replacement accounts. Platforms would also need to verify the identity of advertisers claiming to represent legitimate businesses and confirm that anyone promoting banking or investment products holds the appropriate authorisation from the Financial Conduct Authority. Additional requirements cover strengthening defences against account hijacking, auditing AI-powered ad-creation tools for potential misuse, and establishing dedicated reporting channels for law enforcement bodies.

Ofcom’s rationale for the intervention is stark. The regulator estimates that UK consumers lose more than £200 million each year to fraudulent online advertisements, with more than half of UK adults having encountered potentially deceptive ads. According to the regulator, digital advertising generates over £40 billion annually across the UK, providing the bulk of revenue for the large platforms selling the ad space, yet those platforms have, in Ofcom’s view, not done enough to protect users from criminals exploiting that infrastructure.

Once adopted, non-compliant firms could face fines of up to £18 million or 10 per cent of global annual revenue, whichever is the greater. Ofcom has opened a public consultation that will run until 2 October 2026; the regulator aims to publish final decisions by mid-2027, after which the rules will require parliamentary approval before taking effect.

Consumer group Which? welcomed the proposals but warned against complacency over the timeline. The organisation’s head of policy and advocacy, Rocio Concha, noted that the current schedule leaves consumers exposed until at least 2027 at the earliest, describing that gap as “very problematic” given the pace at which AI is being used to generate increasingly convincing scam content. Ofcom indicated that platforms need not wait for the formal legal requirements and urged them to strengthen their ad-fraud defences immediately.

Source: TechNadu