“This is disgraceful”: ACCC takes Meta to court over misleading crypto ads on Facebook

“This is disgraceful”: ACCC takes Meta to court over misleading crypto ads on Facebook

The nation’s consumer watchdog is taking Facebook’s parent company Meta to the Federal Court, alleging the social media platform “aided and abetted” scam cryptocurrency ads depicting prominent Australians such as Dick Smith and former NSW premier Mike Baird.

The move comes a month after Fortescue founder Andrew ‘Twiggy’ Forrest initiated legal action against the tech giant in WA, alleging similar ads used his photo without his permission to promote crypto schemes.

In the claim, the Australian Competition and Consumer Commission (ACCC) alleges Meta breached consumer law or the Australian Securities and Investments Commission (ASIC) Act.

“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.”

The ACCC said when Facebook users clicked the ads - which endorsed investment in cryptocurrency - they were directed to a fake media article that falsely quoted the person featured on the ad.

Users were then prompted to sign up and would subsequently be “contacted by scammers who used high pressure tactics” like “repeated phone calls” to convince people to deposit funds into the fake schemes.

“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,” said Sims.

He also noted the watchdog was made aware of one instance where a consumer lost more than $650,000 due to one of the scams being falsely advertised as an investment opportunity on the platform. 

“This is disgraceful,” Sims said.

“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.”

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Melbourne-founded LawAdvisor secures $7m in backing after raising the bar with new technology

Melbourne-founded LawAdvisor secures $7m in backing after raising the bar with new technology

Melbourne-founded Legal-tech startup LawAdvisor Ventures has raised...

Mildura Brewery, Australia Draught enter voluntary administration after Broo directors depart

Mildura Brewery, Australia Draught enter voluntary administration after Broo directors depart

With its founder and former CEO no longer on the board, land in Bal...

Former ANZ subsidiary breached obligations over cybersecurity failures

Former ANZ subsidiary breached obligations over cybersecurity failures

RI Advice will repay $750,000 in legal fees to the corporate watchd...

On-demand grocery delivery app SEND goes into voluntary administration

On-demand grocery delivery app SEND goes into voluntary administration

A Sydney-based grocery delivery app that promised 46,000 users thei...