Half of crypto ads on Facebook are scams or violate Meta’s policies, consumer regulator alleges

More than half of cryptocurrency-related ads on Facebook analysed by Australia’s consumer regulator were scams or violated Meta’s policies, a court has heard.

The Australian Competition and Consumer Commission (ACCC) took Meta to court over celebrity scam ads in 2022, alleging the company had engaged in false, misleading or deceptive conduct in publishing the ads, and aiding and abetting the false conduct by the advertisers.

In a ruling issued last week, it was revealed the ACCC has alleged that, since at least January 2018, “Meta has been aware that a significant proportion of cryptocurrency advertisements on the Facebook platform have used misleading or deceptive promotional practices”.

The court heard a preliminary analysis of cryptocurrency ads by the ACCC revealed that 58% of the ads and landing pages for those ads reviewed violated Meta’s “advertising policies or, potentially, involved scams”.

Public figures falsely used in the ads to promote the scams include David Koch, Dick Smith, Mike Baird, Andrew Forrest, Waleed Aly, Celeste Barber, Chris Hemsworth, Justin Hemmes, Harry Triguboff, Travers Beynon, Karl Stefanovic, Mark Ferguson, Mel Gibson, Mike Amor, Nicole Kidman, Mike Cannon‑Brookes, Scott Pape, Eddie McGuire, Daniel Ricciardo, Chris Brown, Liam Hemsworth, Anthony Pratt, Frank Lowy, Russell Crowe and James Packer.

Celebrities falsely used in the Facebook ads to promote cryptocurrency scams included Waleed Aly, Celeste Barber, Karl Stefanovic and David Koch.

The ACCC said it may find further names after the discovery process in the case. Initially it identified 600 ads as part of the claim but is now focused on 234 ads.

The regulator has alleged that, while Meta stops the individual ads and pages once complaints are received, and sometimes bans all associated accounts, the company has continued to show and earn revenue from similar ads featuring the same celebrity or other public figures.

Meta has failed to adopt reasonable safeguards to prevent or significantly reduce the prevalence of the ads, the ACCC alleges, and Meta “has had the technical ability, or could have developed technology – which could place a warning on advertisements to the effect that users should exercise care as advertisements on the Facebook platform have falsely suggested that the public figure concerned endorses a money-making scheme or a trading scheme – but has not given such warnings.”

A Meta spokesperson said scams are a complex threat that target, deceive and manipulate across industries.

“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.”

In response to questions from members of parliament on the social media inquiry last month, Meta outlined that in addition to suspending and deleting accounts, pages and ads, it has also taken legal action against bad actors violating the company’s terms.

It said between January 2023 and January 2024, it had taken action against hundreds of thousands of accounts targeting countries including Australia.

“When a scam occurs, typically our services represent only one part of the attack chain, meaning we do not have visibility of the scam from end to end,” Meta said in a written response to MP questions.

Meta announced in June that new advertisers on the platform may need to verify a phone number associated with their account before advertising.

Of the 433 cases related to 10,294 ads between January 2023 and February 2024 that were reported to Meta through the ACCC’s scam reporting channel, all were reviewed and found to be violating and were taken down, the company said.

Scamwatch reports that so far in 2024 there have been reported losses of more than $13m as a result of investment scams promoted on social media, compared with $134m in reported losses to scams overall.

A hearing date has yet to be set for the case.

Article Credit: https://www.theguardian.com/technology/article/2024/aug/15/crypto-ad-scams-facebook-meta-accc-court-case