October 3, 2022

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Australian consumer watchdog files lawsuit against Meta over shady crypto ads

2 min read

The Australian Competition and Consumer Commission announced today that it has filed a lawsuit against Meta Platforms Inc. for a number of dubious cryptocurrency ads that appeared on the Facebook platform, some of which led to Australians losing large amounts of money.

The suit claims that Meta deceived and misled its users by “publishing scam advertisements featuring prominent Australian public figures.” This was in breach of Australian Consumer Law, or the Australian Securities and Investments Commission Act, according to the suit.

“The ACCC alleges that the ads, which promoted investment in cryptocurrency or money-making schemes, were likely to think Facebook users into believing the advertised schemes were associated with well-known people featured in the ads, such as businessman Dick Smith, TV presenter David Koch, and former NSW Premier Mike Baird, ”said the ACCC. “The schemes were in fact scams, and the people featured in the ads had never approved or endorsed them.”

Those who signed up at first were asked to make a small investment of around $ 250, but as time went on, the people were pressured into investing more money. This sometimes wasn’t peanuts, either, with one person alone losing A $ 650,000 ($ 480,000).

Australia’s second-richest man, the billionaire mining magnate Andrew Forrest, was another person who appeared in the scam ads. In February, he called Meta “criminally reckless” and accused the company of not creating a “corporate culture to prevent its systems being used to commit crime.”

Forrest announced that he was in the process of suing Meta, not just because of all the Australians that had been scammed but to stop this happening all over the world. The scam ads using well-known people to entice people into making an investment are actually pretty common on the platform.

In Australia, one person lost all of her life savings of $ 80,000 after investing in an ad containing Forrest’s false endorsement. It was reported that a similar ad using Forrest’s face led to another Australian losing a massive $ 670,000. At the time, Meta said it was doing everything it could to stop the spread of such ads.

The ACCC said today that Meta has not taken “sufficient steps to address the issue.” What’s more, it said, Meta is still generating advertising revenue from such scams every time its technologies fail to take them down.

“We don’t want ads seeking to scam people out of money or think people on Facebook – they violate our policies and are not good for our community,” an Australia-based spokeswoman for Meta said in a statement. “We will review the recent filing by the ACCC and intend to defend the proceedings.”

Image: Richard Patterson / Flickr

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