Australian Regulator Sues Facebook Parent Meta For Publishing 'Scam Crypto Ads'

Meta, the parent organization of the social media giant Facebook has been sued for publishing scam crypto advertisements by the Australian Competition and Consumer Commission (ACCC).

The ACCC announced a few days ago that it has filed a federal case against the tech company -- Meta Platforms and Meta Ireland Platforms —alleging it was engaged in "false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures." The ads, which also feature investment in cryptocurrency, have been rife in the platform since 2020.

These advertisements feature images of well-known Australian personalities, who claimed they have made it big with the investments. These personalities include former New South Whales premier Mike Baird, TV presenter David Koch and businessman Dick Smith, to name a few.

Interestingly, the ACCC claimed that these schemes are scams and the personalities featured in the ads had never agreed or endorsed them.

Apart from those, these alleged scam crypto ads contain links, which redirect Facebook users to a fake article containing quotes attributed to the featured well-known public figure. Visitors were then invited to sign up and were eventually contacted by the scammers.

These alleged scammers reportedly use tactics like annoying constant phone calls, convincing users to deposit funds into the schemes. ACCC also alleged that Meta was aware of the scam ads' presence on Facebook but did not take sufficient steps to resolve the issue.Surprisingly, even after the public figures had complained that their names and images were used in similar ads, these scam ads were still on Facebook.

"Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads," ACCC Chair Rod Sims said.

"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."

"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.

"The essence of our case is that Meta is responsible for these ads that it publishes on its platform," explained Sims.

The Australian watchdog is aware that one of the consumers had lost over $480,000 in one of the scams that falsely advertises as an investment opportunity on the social media platform. The ACCC is seeking injunctions, declarations, costs and other orders against Meta.

A previous investigation uncovered that the sites were registered to addresses in Ukraine and Russia. Meta had a hard time keeping the ad off Facebook since scammers change the URLs for the scam sites very frequently.

Meta claimed it has co-operated with the ACCC and would review the filing in the federal 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. We use technology to detect and block scam ads and work to get ahead of scammers’ attempts to evade our detection systems," the company noted.