ACCC takes Meta to task over alleged misleading crypto ads on Facebook
The ACCC has commenced Federal Court proceedings against Meta - the owner of the Facebook social media platform - for alleged breaches of the Australian Consumer Law and ASIC Act, charging that they engaged in false, misleading and deceptive conduct by publishing scam advertisements.
The advertisements featured several prominent Australians such as Dick Smith, David Koch and Mike Baird and promoted investment in cryptocurrency or money making schemes. The prominent Australians never actually approved the ads, and did at no stage endorse them.
The advertisements contained links which led users to sign up for the scam, to which they were promptly contacted by scammers who used high pressure tactics to convince users to invest in the scheme.
The ACCC said:
It is alleged that Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue. 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.
The previous ACCC Chair, Rod Sims, said:
We allege that the technology of Meta enabled these ads to be targeted to users most likely to engage with the ads, that Meta assured its users it would detect and prevent spam and promote safety on Facebook, but it failed to prevent the publication of other similar celebrity endorsement cryptocurrency scam ads on its pages or warn users,
It is alleged that among the scam's victims, one user lost more than $650,000 individually due to the scams falsely advertising an investment opportunity on Facebook.
This is a timely reminder of how crypto-markets participants need to continue, or in some circumstances establish, compliance with regulatory framework such as the Australian Consumer Law, or the ASIC Act, and that crypto scams are in fact often social media scams which happen to use crypto.
It is also a timely reminder for consumers to remain vigilant in light of increased scams seeking to take advantage of the rapid adoption of crypto-assets as the last line of defence for any scam target is their own knowledge and dilligence.