In a recent conversation, I had the opportunity to speak with Sarah Mitchell, a senior analyst at the Australian Competition and Consumer Commission (ACCC), regarding the ongoing legal battle against Meta. The ACCC accuses Meta of allowing over half of the cryptocurrency-related advertisements on Facebook to be scams or policy violations, with the tech giant allegedly benefiting financially from these misleading ads. This issue has not only harmed countless users but has also damaged the reputations of numerous public figures.
Sarah began by detailing the origins of the lawsuit. “We initiated the case against Meta in 2022 following a surge in complaints about scam ads featuring unauthorized endorsements from well-known public figures,” she explained. “Our preliminary analysis showed that 58% of the cryptocurrency ads and their respective landing pages breached Meta’s advertising policies or were outright scams.” The deceptive ads falsely utilized names from a veritable who’s who of celebrities, including David Koch, Celeste Barber, Dick Smith, and international stars like Chris and Liam Hemsworth. “These ads misled users into believing that these public figures endorsed various money-making and trading schemes,” Sarah noted. “It’s a clear case of deceptive conduct.”
The ACCC’s findings revealed that Meta had been aware of this issue since at least January 2018. “Despite this awareness, Meta has continued to publish these ads and has profited from them,” Sarah added. “Even when individual ads were taken down following complaints, similar ads would resurface, continuing the cycle of deception.” Initially, the ACCC identified 600 problematic ads but has since narrowed its focus to 234 ads for the case. Sarah mentioned that more names might emerge as the discovery process continues. “It’s alarming to consider how many more public figures could have been exploited without their consent,” she said.
When discussing Meta’s stance, Sarah acknowledged that the company had taken some steps to address the problem. “Meta has suspended and deleted accounts, pages, and ads flagged as violating their policies,” she said. “They’ve also taken legal action against bad actors violating the company’s terms.” However, she emphasized that these actions were insufficient. “The ACCC alleges that Meta has failed to implement reasonable safeguards to prevent or significantly reduce the prevalence of these scam ads,” Sarah explained. “We believe that Meta has the technical capability to develop warning systems for these ads but has chosen not to.” A Meta spokesperson countered that scams are a complex threat that continually adapts to evade enforcement. “Scammers use every platform available to them and constantly adapt to evade enforcement. Meta doesn’t want scams on its platforms, and we will continue to work tirelessly to prevent them and protect our users,” the spokesperson stated.
One of the most striking aspects of our conversation was the human cost of these scams. “Scamwatch reports that so far in 2024, there have been reported losses of more than $13 million due to investment scams promoted on social media,” Sarah pointed out. “This figure is part of a broader $134 million in reported losses to scams overall. The financial and emotional toll on victims is devastating.” Sarah recounted stories of individuals who had lost their life savings to these scams. “Imagine seeing an ad featuring a trusted public figure, thinking it’s a safe investment, only to lose everything,” she said. “It’s heartbreaking.”
As we concluded the interview, Sarah expressed hope that the court case would lead to more stringent regulations and better consumer protections. “We hope this case will set a precedent for how tech giants handle scam ads,” she said. “Our goal is to ensure that platforms like Facebook implement robust measures to protect users from deceptive practices.” In June, Meta announced that new advertisers might need to verify a phone number associated with their account before advertising. While this is a step in the right direction, Sarah believes more comprehensive measures are needed. “Verification alone won’t solve the problem,” she asserted. “We need a multi-faceted approach that includes monitoring, reporting, and immediate action against deceptive ads.”
The ACCC’s court case against Meta shines a light on the darker side of social media advertising. It serves as a stark reminder that even in our digital age, consumer vigilance and regulatory oversight remain crucial. As the case progresses, it will be interesting to see how Meta responds and what changes will be implemented to safeguard users. For now, the focus remains on holding Meta accountable and ensuring that such deceptive practices are curtailed. As Sarah aptly put it, “The fight against scams is ongoing, but with collective effort, we can make a significant difference.”
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