Dick Smith, the owner of Dick Smith Electronics and Australian Geographic, is threatening to sue The Guardian due to false advertisements appearing on their website which promote a common scam which in turn suggests Smith supports a cryptocurrency "investment" which is in reality a scam.
The advertisements feature Smith’s image and link to stories which mimic legitimate news articles, except these “how to make money easy” and getting “rich in a few days” use fake quotes from Smith endorsing investment in cryptocurrencies. The "investment" is of course not in any actual cryptocurrency but is simply a scam.
In response, Dick Smith’s legal team is threatening to commence defamation proceedings if they do not receive a satisfactory response from The Guardian. Mark O’Brien, a lawyer acting on behalf of Smith, stated in a letter to the Guardian’s editor:
Mr Smith is determined to ensure the cryptocurrency scam comes to a permanent end … While we acknowledge that The Guardian Australia does take the fraudulent advertisements down once notified, that does not prevent your Australian readers from falling victim to this prolific cryptocurrency scam.
Mr Smith wants The Guardian to prevent the scam being advertised in the future, which we can all agree would be a reliable outcome, but as recent advertising scams show, can be easier said that done when a significant amount of online advertising is almost entirely automated.
Fraudulent "investment" schemes which promote fake cryptocurrency opportunties have been occurring for several years now.
In July, the ABC reported that an 80-year old pensioner on the Sunshine Coast lost $82,000 in a scam where he was initially lured in by Facebook advertisements with Dick Smith and David Koch promoting a bitcoin business.
These scams are part of a larger trend, where fraudulent schemes use celebrity videos or images with fake endorsements to their "investment opportunity" to part marks from their money.Apple co-founder Steve Wozniak was featured in a similar scam on YouTube and is now part of a group that has filed a complaint about the matter against Google and YouTube in the California Superior Court in the County of San Mateo. Similarly the creator of Big Brother, John De Mol, and British Financial Expert, Martin Lewis have both been involved in lawsuits against Facebook in respect of similar scams.
Unfortunately this trend shows no signs of abating. Cyber security expert David Lacey, who runs a charity helping victims of cyber crime stated in the July ABC Report that:
We have seen a 27 per cent increase over the past three months compared to this time last year.
With more institutional investors than ever before purchasing digital currency, and central banks taking digital currencies more seriously, scams are only likely to continue. Economic drivers such as low interest rates, lower returns in super and financial strains can cause customers to engage in risky behaviour. It's unclear how the arms race of advertising automation and detection of scams ends but this is a problem which needs more urgent attention from advertising platforms.