ACCC sues Meta over Facebook scam crypto ads

Australia's consumer watchdog has begun court proceedings against Meta for allowing scam cryptocurrency ads featuring prominent Australian public figures to run on Facebook.

The Australian Competition and Consumer Commission (ACCC) alleges that Meta "aided and abetted" the bad actors behind the scams, and that the company "engaged in false, misleading or deceptive conduct" by publishing the ads.

This conduct was in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act), the ACCC alleges in its suit, filed in federal court.

The ads used photographs of well-known figures—such as businessman Dick Smith, TV presenter David Koch, Fortescue chairman Andrew Forrest and former NSW premier Mike Baird—to promote investment in cryptocurrency or money-making schemes. The ads linked to fake media articles that included quotes attributed to the public figures. Users were then invited to sign up to the schemes, and were subsequently contacted by scammers who reportedly pressured users to deposit funds.

The ACCC alleges that the ads were likely to mislead Facebook users into believing the schemes were associated with these figures, despite the fact they had never approved or endorsed them.

The scam has cost unsuspecting Australians thousands of dollars. The ACCC said one person lost AU$650,000 (US$480,000) through the scam. In another instance, a 77-year-old grandmother lost $80,000.

"This is disgraceful," ACCC chair Rod Sims said in a press release. "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."

Several of the people featured in the ads have complained about being misrepresented. Fortescue's Forrest has filed his own lawsuit against Meta in the Magistrates Court of Western Australia.

The ACCC said Facebook "did not take sufficient steps to address the issue" even after the celebrities reported the ads.

"Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads," Sims said in the press release.

The ads have appeared on the platform since 2020. The scammers behind the ads have used tactics to evade detection in Facebook's ad filtering, including frequently changing the URLs for the scam sites and the text of the ads, according to Guardian Australia. An investigation by the publisher found the sites were registered to addresses in Russia and Ukraine.

"The essence of our case is that Meta is responsible for these ads that it publishes on its platform," Sims said.

The ACCC is seeking declarations, injunctions, penalties, costs and other orders.