Online Safety Bill set to benefit P2P platforms advertising online
The Online Safety Bill has been tipped to protect consumers and potentially make it easier for peer-to-peer lending platforms to attract customers online, after being introduced in Parliament today.
Last week, the government added a duty to the bill which will bring fraudulent paid-for adverts on social media and search engines into its scope, whether they are controlled by the platform itself or by an advertising intermediary.
This means companies have to clamp down on ads with unlicensed financial promotions, fraudsters impersonating legitimate businesses and ads for fake firms.
Lee Birkett, chief executive of P2P platform JustUs, said the bill should protect consumers from scammers and make it easier for P2P firms to advertise for new investors online as it would remove scammers that are currently buying the top clicks.
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“I’m very pleased,” he said.
“It should enable less scams out there and scammers buying the top clicks meant it was costing so much to generate an investor, the space was dominated by scams. It will make it easier for P2P platforms to attract customers and it will protect consumers by getting rid of scam adverts.
“It will certainly be a positive improvement. But why it had to be fought so hard to get paid-for advertising included in it is beyond me.”
Bruce Davis, co-founder of crowd bonds platform Abundance and director of the UK Crowdfunding Association (UKCFA), said that that in theory removing fraudulent paid-for adverts will cut the cost of legitimate advertising for P2P platforms.
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“The scammers behind the scam adverts bid for certain key words and that pushes up the price of those key words so in theory it will reduce the price and cost of legitimate advertising online,” he said.
Davis said that there has been frustration for some time between the Financial Conduct Authority and Advertising Standards Authority (ASA) with both seeing the other as responsible for regulating misleading financial adverts but this has improved.
“I think the good news is that’s largely been addressed with some improved practices,” he said.
“After the Gloster Report we’ve seen more action from the ASA on financial ads, they look to have listened to what was said and have taken action.”
The Online Safety Bill will be regulated by Ofcom which will have the power to fine companies failing to comply with the laws up to 10 per cent of their annual global turnover, force them to improve their practices and block non-compliant sites.
The government has revealed that executives whose companies fail to cooperate with Ofcom’s information requests could now face prosecution or jail time within two months of the Bill becoming law, instead of two years as it was previously drafted.
Fraudulent paid-for advertising is just one part of the range of issues the bill will cover.
It will require social media platforms, search engines and other apps and websites allowing people to post their own content to protect children, tackle illegal activity and uphold their stated terms and conditions.