‘Untold losses’: Facebook sued for helping scammers impersonate celebs and rip-off users

Facebook is being sued over claims it helped scammers impersonate celebrities and rip off users.

Facebook is being sued over claims it helped scammers impersonate celebrities and rip off users. Photo: TND

Australia’s consumer watchdog is suing Facebook, accusing the social media giant of helping cryptocurrency scammers impersonate celebrities and rip-off their users, causing “untold losses”.

Fraudsters have for years using Facebook to run scam ads, with images of public figures such as TV presenter David Koch and mining boss  Andrew Forrest used to lure users into fake cryptocurrency investment deals.

In Federal Court proceedings filed on Friday, the Australian Competition and Consumer Commission alleges Meta (Facebook’s parent) has aided and profited from these “disgraceful” scams.

“The technology of Meta enabled these ads to be targeted to users most likely to engage with the ads,” ACCC chairman Rod Sims said on Friday.

“Meta should have done more to detect and then remove false or misleading ads on Facebook, to prevent consumers from falling victim to ruthless scammers.”

The scam ads work by posting images of prominent figures, often next to fake quotes promoting bitcoin. Users who click on the links are taken to websites made to look like legitimate investment programs endorsed by those celebrities – but they’re actually scams designed to steal money.

A scam website impersonating Dick Smith and Waleed Aly. Photo: Screenshot

The ACCC case is just Meta’s latest legal battle over its role in hosting these scam ads on its platform. Mr Forrest has commenced criminal proceedings against the company over scam ads featuring his photo.

Mr Forrest wrote to Facebook founder Mark Zuckerberg in 2019 about the scams, but his personal appeal failed to stop the ads.

Mr Sims said the scams had caused “untold losses” for consumers. One user alone lost more than $650,000 after being lured in.

“This is disgraceful,” Mr Sims said on Friday.

“The celebrity endorsement cryptocurrency scam ads were still being displayed on Facebook even after public figures around the world had complained that their names and images had been used in similar ads without their consent,” he said.

Scammers have impersonated dozens of famous Australian celebrities, politicians and business owners to promote their fraud over the years.

They include former NSW premier Mark Baird, Boost Juice founder Janine Allis, Thor actor Chris Hemsworth and billionaire Dick Smith.

A scam Facebook post impersonating Richard Branson. Photo: Screenshot

The ACCC alleges that because Facebook is responsible for the content, it has engaged in false, misleading or deceptive conduct under Australian consumer law.

“It is also alleged that Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers,” the ACCC said.

However, Facebook said it would reject any assertion that it deliberately allowed scam ads on its platform.

“We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community,” a spokesperson for the social media giant said on Friday.

“We’ve co-operated with the ACCC’s investigation into this matter to date. We will review the recent filing by the ACCC and intend to defend the proceedings. We are unable to comment further on the detail of the case as it is before the Federal Court.”

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