More than half of the cryptocurrency ads on Facebook analyzed by the Australian Consumer Watchdog were scams or violated Meta’s policies, a court heard.
The Australian Competition and Consumer Commission (ACCC) sued Meta in 2022 over fraudulent celebrity ads, alleging that the company acted falsely, misleadingly or deceptively in publishing the ads and aided and abetted the advertisers’ false conduct.
In a ruling last week, it was revealed that the ACCC has accused Meta, at least since January 2018, of “using misleading or deceptive advertising practices in a significant proportion of cryptocurrency advertising on the Facebook platform.”
The court heard a preliminary analysis of cryptocurrency ads by the ACCC which found that 58% of the ads and landing pages of those reviewed ads breached Meta’s “advertising policies or potentially involved fraud”.
Public figures falsely used in the advertisements to promote the scams include David Koch, Dick Smith, Mike Baird, Andrew Forrest, Waleed Aly, Celeste Barber, Chris Hemsworth, Justin Hemmes, Harry Triguboff, Travers Beynon, Karl Stefanovic, Mark Ferguson, Mel Gibson, Mike Amor, Nicole Kidman, Mike Cannon-Brookes, Scott Pape, Eddie McGuire, Daniel Ricciardo, Chris Brown, Liam Hemsworth, Anthony Pratt, Frank Lowy, Russell Crowe and James Packer.
The ACCC said it may be able to identify more names once it has completed its investigation into the case. Originally, 600 reports were identified as part of the lawsuit, but it is now focusing on 234 reports.
The regulator claims that while Meta stops individual ads and pages once complaints are received, and sometimes blocks all associated accounts, the company continues to show similar ads featuring the same celebrities or other public figures and generates revenue from them.
Meta failed to put in place adequate safeguards to prevent or significantly reduce the spread of the ads, the ACCC alleges, and Meta “had the technical ability, or could have developed technology – that could place a warning on ads urging users to be cautious because ads on the Facebook platform falsely suggest that the public figure in question endorses a money-making or trading scheme – but did not issue such warnings.”
A Meta spokesperson said fraud is a complex threat that targets, deceives and manipulates victims across industries.
“Fraudsters are using any platform available to them and are constantly adapting to evade enforcement. Meta does not want fraud on its platforms and we will continue to work tirelessly to prevent it and protect our users.”
In response to questions from MPs about the social media investigation last month, Meta said that in addition to blocking and deleting accounts, pages and ads, it had also taken legal action against actors who violated the company’s terms and conditions.
It said that between January 2023 and January 2024, action was taken against hundreds of thousands of accounts targeting countries such as Australia.
“When a fraud occurs, our services usually only represent part of the attack chain, which means we do not have a comprehensive overview of the fraud,” Meta said in a written response to questions from MEPs.
Meta announced in June that new advertisers on the platform may be required to verify a phone number linked to their account before they can advertise.
Of the 433 cases related to 10,294 advertisements between January 2023 and February 2024 reported to Meta through the ACCC’s fraud reporting channel, all were reviewed and classified as infringing and removed, the company said.
According to Scamwatch, so far in 2024, over $13 million in losses have been reported from investment scams promoted on social media, compared to $134 million in total losses from fraud.
A hearing date in the case has yet to be set.
