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Meta has a new scam ads problem down under

Australia’s Competition and Consumer Commission (ACCC) has instigated proceedings against Facebook owner Meta for allowing the spread of scam ads on its platforms and — it alleges — not taking sufficient steps to tackle the issue.

The watchdog said today that it’s seeking “declarations, injunctions, penalties, costs and other orders” against the social media giant, accusing it of engaging in “false, misleading or deceptive conduct” by publishing scam advertisements featuring prominent Australian public figures — activity the ACCC asserts breaches local consumer laws.

Specifically, it alleges Meta’s conduct is in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act).

The regulator’s accusation extends to alleging that Meta “aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers” (i.e. who used its platform to net victims for their scams).

Meta refutes the accusations, saying it already uses technology to try to detect and block scams.

In a statement on the ACCC’s action attributed to a company spokesperson, the tech giant said:

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. We use technology to detect and block scam ads and work to get ahead of scammers’ attempts to evade our detection systems. We’ve cooperated with the ACCC’s investigation into this matter to date. We will review the recent filing by the ACCC and intend to defend the proceedings. We are unable to further comment on the detail of the case as it is before the Federal Court.

The ACCC says the scam ads it’s taking action over promoted cryptocurrency investment or money-making schemes via Meta’s platforms, and featured people likely to be well known to Australians — such as businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird — who could be seen in the ads apparently endorsing the schemes, yet, in actuality, these public figures had never approved or endorsed the messaging.

“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. 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 scheme,” it explains.

The ACCC also notes that celebrity endorsement cryptocurrency scam ads continued being displayed on Facebook in Australia after public figures elsewhere around the world had complained that their names and images had been used in similar ads without their consent.

A similar complaint was pressed against Facebook in the U.K. back in 2018 — when local consumer advice personality Martin Lewis sued the platform for defamation over a flood of scams ads bearing his image and name without his permission which he said were being used to trick and defraud U.K. consumers.

Lewis ended that litigation against Facebook in 2019 after it agreed to make some changes to its platform locally — including adding a button to report scam ads. (A Facebook misleading and scam ads reporting form was subsequently also made available by the company in Australia, the Netherlands and New Zealand.)

Despite ending his suit, Lewis did not end his campaigning against scam ads — most recently (successfully) pressing for draft U.K. Online Safety legislation, which was introduced to the country’s parliament yesterday, to be extended to bring scam ads into scope. That incoming regime will include fines of up to 10% of global annual turnover to encourage tech giants to comply.


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