ACCC Takes Facebook To Court Over Crypto Scam
The ACCC has started Federal Court proceedings against Facebook parent Meta alleging that they engaged in false, misleading or deceptive conduct by “publishing scam advertisements featuring prominent Australian public figures.”
The ads in question featured the likes of David ‘Kochie’ Koch, Dick Smith, and former NSW Premier Mike Baird without their consent, appearing to endorse dodgy crypto buying schemes.
The ACCC alleges that the ads “were likely to mislead Facebook users into believing the advertised schemes were associated with well-known people featured in the ads.”
“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC Chair Rod Sims said.
“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.”
ACCC alleges that Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed “but did not take sufficient steps to address the issue.”
“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,” Mr Sims said.
“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.”
David Koch told viewers of Sunrise that these scams ads are “the bane of my life”, adding. “it just infuriates me to be used in these scams, so really watch out for them.”
“Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads. 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.”
Sims points to a “shocking instance” where a consumer lost more than $650,000 due to one of these scams.
“This is disgraceful”, Sims concludes.
The ACCC is seeking declarations, injunctions, penalties, costs and other orders.