UK Targets Big Tech Over Investment Scam Ads Under Online Safety Act

The UK is moving to tighten oversight of major online platforms as investment scams and fraudulent advertising continue to spread across social media.

Communications regulator Ofcom has launched a new consultation under the Online Safety Act (OSA), proposing stronger obligations for major technology companies to prevent scam advertisements from reaching users. Platforms including Facebook, Instagram, TikTok, X, YouTube, Snapchat and WhatsApp would face enhanced responsibilities, while Google and ChatGPT would also be subject to new scam advertising requirements.

The initiative follows growing concern over online investment fraud, much of which begins with sponsored advertisements promoting fake trading platforms, cryptocurrency schemes and high-return investment opportunities. Fraudsters frequently use AI-generated content, cloned news articles and fake celebrity endorsements to lure victims before directing them to messaging apps or fraudulent websites.

According to Ofcom, fraudulent online advertisements cost UK consumers around £200 million annually, while more than half of UK adults report encountering suspected scam ads online.

The regulator warned that technology companies have not done enough to prevent scammers from abusing their advertising systems and said platforms could face fines of up to 10% of global annual revenue for failing to meet their legal obligations once the rules take effect.

The proposals form part of the UK's broader effort to shift more responsibility onto technology companies for online fraud, reflecting increasing regulatory pressure on digital platforms that have become primary channels for investment scams. The consultation remains open until October, with the final rules expected to be adopted next year.