Australian watchdog sues Meta over scam celebrity crypto ads on FB

The Australian consumer watchdog has filed a lawsuit against Meta, the owner of Facebook, saying that the social network allegedly engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures.

The ACCC alleged that Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.

“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” the Australian Competition and Consumer Commission (ACCC) Chair Rod Sims said in a statement late on Friday.

The ads, which promoted investment in cryptocurrency or money-making schemes, were likely to mislead Facebook users into believing the advertised schemes were associated with well-known people featured in the ads, such as businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird.

The schemes were in fact scams and the people featured in the ads had never approved or endorsed them.

The ads contained links which took Facebook users to a fake media article that included quotes attributed to the public figure featured in the ad endorsing a cryptocurrency or money-making scheme, said the ACCC.

Users were then invited to sign up and were subsequently contacted by scammers who used high pressure tactics, such as repeated phone calls, to convince users to deposit funds into the fake schemes.

“It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in an ad to visit the ad’s landing page, using Facebook algorithms. Those visits to landing pages from ads generate substantial revenue for Facebook, Sims added.

It is alleged that Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue.

The celebrity endorsement cryptocurrency scam ads were still being displayed on Facebook even after public figures around the world had complained that their names and images had been used in similar ads without their consent.

“Meta should have been doing more to detect and then remove false or misleading ads on Facebook, to prevent consumers from falling victim to ruthless scammers,” said Sims.

Meta was yet to react to the lawsuit.

Sims said that Meta failed to take sufficient steps to stop fake ads featuring public figures, even after those public figures reported to Meta that their name and image were being featured in celebrity endorsement cryptocurrency scam ads.

“In one shocking instance, we are aware of a consumer who lost more than $650,000 due to one of these scams being falsely advertised as an investment opportunity on Facebook. This is disgraceful,” Sims informed.

Scamwatch figures show that in 2021, consumers reported losses of $99 million to cryptocurrency investment scams.

–IANS

na/sks

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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