Australia’s consumer watchdog is taking Facebook’s parent company, Meta, to court over a long-running series of scam investment ads.
The Facebook ads spruik fraudulent investment schemes and falsely claim to have the endorsement of billionaire investors and celebrities.
“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC chair Rod Sims said.
The scammers use photos of famous Australians, including Dick Smith, mining magnate Andrew ‘Twiggy’ Forrest and Boost juice founder Jenine Allis, plus TV personalities such as David ‘Kochie’ Koch, Virginia Trioli and Waleed Aly, and celebrities Chris Hemsworth and Celeste Barber.
The Facebook ads then link to a fake news article that encourages victims to hand over their money as part of a bogus cryptocurrency investment scheme.
None of the high-profile individuals featured in the ads has any connection whatsoever to these purported cryptocurrency investment schemes.
“They’re known for their business acumen, they’re known for providing financial advice. That’s their area of expertise,” Associate Professor Cassandra Cross, a Queensland University of Technology criminologist specialising in online fraud, told The New Daily.
“For the offender to use those particular identities, and to attribute recommendations and endorsements to opportunities using those particular names, is an effective technique that potentially can draw a victim in thinking that it’s a good opportunity that has a solid foundation.”
Associate Professor Cross said she had encountered many people who’ve lost money to these scams, but noted that the real figure is likely higher because many victims might feel a sense of shame that stops them reporting their losses.
Data from the ACCC’s Scamwatch found Australians lost at least $99 million to cryptocurrency scams in general last year.
According to the ACCC, one person even lost more than $650,000 to the specific kind of scam in question.
Two years ago, the ABC reported on an 80-year-old pensioner who lost more than $80,000.
“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,” the ACCC’s Mr Sims said.
“Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads.
“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.”
Famous faces speak out
Many of the entrepreneurs and celebrities whose likenesses have been used have publicly condemned the scam ads over the years.
“I’m very disappointed about the number of Australians who lost money in these scams,” Dick Smith told the ABC on Friday.
Sunrise host and personal finance commentator Kochie also slammed the scam last year.
“This is the bane of my life, these scam ads,” he told viewers.
Last month, mining magnate Andrew ‘Twiggy’ Forrest launched his own proceedings against the internet giant over a failure to prevent these scam advertisements using his likeness.
Mr Forrest’s lawyer, Steven Lewis, told The New Daily that his client had raised concerns about the scams a number of times in the past.
“Innocent people are losing money, as I speak, to clickbait advertising scams,” Mr Forrest said back in February.
The ACCC’s case is a civil claim, whereas Mr Forrest has launched a criminal proceeding against the company in Western Australia, and a civil one in California.
Meta – the company formerly known as Facebook – plans on fighting back in court.
“We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community,” a spokesperson said.
“We use technology to detect and block scam ads and work to get ahead of scammers’ attempts to evade our detection systems.”
Increasingly sophisticated scams
From October to December 2021, the platform removed 1.2 billion pieces of spam and 1.7 billion fake accounts.
But the ACCC believes this isn’t enough.
Often victims will need to click through several different websites before they’re scammed into handing over their money, making it easier for the fake ads to evade Facebook’s automatic detection.
“What’s been evolving in recent years is the sophistication and complexity of those types of websites where, previously, they might have looked a little bit dodgy, they might have had typographical errors, it might have been easy to identify that it was potentially fraud,” Associate Professor Cross added.
“But offenders are really quite good at building a digital footprint for companies and for individual profiles and creating materials that do look genuine.”
Associate Professor Cross said the best tactic to avoid getting scammed is to be cautious.
That means not suddenly investing in a scheme when you weren’t looking to invest in the first place, and thoroughly researching any scheme that you do decide to enter.
The most important thing to remember, she added, was to trust your gut feeling.