ACCC takes Facebook parent, Meta, to court over scam crypto ads
Australia’s ACCC is taking Meta to court for knowingly allowing scam celebrity ads for crypto to proliferate on the platform.
The watchdog alleges that, in breach of Australian Consumer Law and the Australian Securities and Investments Commission Act, Meta failed to do enough to limit misleading ads featuring celebrities onto the platform.
The ads promoted crypto or money-making opportunities. They used locally well-known names such as Dick Smith, David Koch and Mike Baird to claim legitimacy. However, these people never endorsed the schemes and they were, in fact, scams.
Once a user had clicked on the ad and provided details, they were subject to high-pressure tactics (think frequent phone calls) to deposit funds into schemes. They would then lose their money to the fraudulent schemes.
“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC Chair Rod Sims said in a statement.
“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.
“We allege that the technology of Meta enabled these ads to be targeted to users most likely to engage with the ads, that Meta assured its users it would detect and prevent spam and promote safety on Facebook, but it failed to prevent the publication of other similar celebrity endorsement cryptocurrency scam ads on its pages or warn users.
“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.”
Scams remain a major issue of concern in crypto spaces. The ACCC notes that just from this wave of scams one consumer lost $650,000. It would be of benefit to the entire industry if social media platform holders – where a lot of highly-targeted advertising for cryptocurrencies takes place – were more responsible in vetting the advertisements that were allowed on their platforms.