Tuesday, May 17, 2022

Competition watchdog ACCC joins Andrew Forrest in sues Facebook over celebrity scam ads

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The Australian Consumer and Competition Commission (ACCC) has taken legal action against Facebook’s parent company, Meta, for engaging in false, misleading or deceptive conduct by publishing scam ads featuring prominent Australians.

Federal court ruled that Facebook violated the Australian Consumer Act (ACL) or the Australian Securities and Investments Commission Act (ASIC Act).

It is also alleged that Meta assisted and assisted the advertisers or was knowingly involved in false or misleading behavior and statements.

An example of an Andrew Forrest cryptocurrency scam ad.

The ACCC’s action comes in the wake of a similar case launched last month by mining billionaire Dr. Andrew Forrest about scam ads featuring him appearing on Facebook.

The furious Fortescue Metals chairman and philanthropist said Facebook was “one of the world’s most pernicious publishers” and was “embarrassingly exploited” while also profiting from the scam.

The mining billionaire has been vociferously campaigning against the scam ads since 2019. A woman in Western Australia lost $60,000 to scammers after seeing the ads featuring Dr Forrest.

The case will have a first hearing before the Western Australian Magistrate’s Court on March 28, ahead of a binding hearing later this year.

The ACCC case alleges that the ads, which promoted investment in cryptocurrency or money-making programs, were likely to trick Facebook users into believing the advertised schemes were associated with famous people featured in the ads, such as businessman Dick Smith, TV presenter David Koch, chairman of Pinstripe Media, publishers of Startup Daily, and former NSW Premier Mike Baird, who in 2019 was a senior NAB executive.

Startup Daily reported on the Baird scam ads when they flooded the social media platform in late 2019.

A Mike Baird scam ad spotted by Startup Daily in November 2019

The ads contained links leading Facebook users to a fake media article with quotes attributed to the public figure in the ad endorsing a cryptocurrency or money-making scheme.

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

ACCC chairman Rod Sims said the regulator’s case is that Meta is responsible for ads it publishes on its platform.

“It’s an important part of Meta’s business to enable advertisers to target users who are most likely to click the link in an ad to visit the ad’s landing page, using Facebook’s algorithms,” he said. .

“Those landing page visits from ads generate significant revenue for Facebook.”

Sims said the celebrity cryptocurrency scams continued to appear on Facebook even after public figures complained about them to the company.

“We claim that Meta’s technology allowed these ads to be targeted to users most likely to respond to the ads, that Meta assured its users that it would detect and prevent spam, and promote security on Facebook, but the has the publication of other similar cryptocurrency scam ads for celebrities on its pages or warning users,” he said.

“Meta should have done more to detect and then remove false or deceptive ads on Facebook to prevent consumers from falling victim to ruthless scammers.”

Sims said a person lost over $650,000 as a result of one of the scam ads

“Besides causing untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads,” 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 used in celebrity cryptocurrency scam ads.”

The ACCC is seeking statements, injunctions, fines, costs and other injunctions.

READ NOW: Andrew Forrest Launches Legal Action Against Facebook Over Cryptocurrency Scam Ads

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