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Facebook, Instagram parent company Meta sued over ‘scam ads’ featuring Dick Smith, David Koch

By consumer affairs reporter Amy Bainbridge

The consumer watchdog is suing Facebook’s parent company, Meta, accusing it of failing to take action against scammers on its social media platform. 

The Australian Competition and Consumer Commission alleges the company engaged in false, misleading and deceptive conduct by publishing scam advertisements featuring prominent Australians.

The ACCC alleges the ads — which promoted fake cryptocurrency investments or other financial schemes — were likely to mislead Australian consumers.

The advertisements used images of businessman Dick Smith, TV presenter David Koch, and former New South Wales premier Mike Baird.

The ACCC says that, in one instance, a victim lost $650,000 to a scam.

“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC chair Rod Sims said.

“It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in an ad to visit the ad’s landing page, using Facebook algorithms.

“Those visits to landing pages from ads generate substantial revenue for Facebook.”

Speaking to the ABC, businessman Dick Smith said he was “glad” the ACCC was taking action. 

“I’m very disappointed about the number of Australians who lost money in these scams,” he said.

Former NSW premier Mike Baird told the ABC he was aware of the proceedings and “fully supportive”. 

The ACCC alleges Meta’s conduct breached Australian Consumer Law (ACL), or the Australian Securities and Investments Commission Act. 

Penalties for breaching ACL can run into millions of dollars. 

The ACCC said people who think they have been scammed should contact their bank or financial institution as soon as possible. 

n a statement, a Meta spokesperson said the company did not want to see “ads seeking to scam people out of money or mislead people on Facebook”. 

“We use technology to detect and block scam ads and work to get ahead of scammers’ attempts to evade our detection systems,” the spokesperson said.

“We’ve cooperated 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.”

In February, Australian businessman Andrew “Twiggy” Forrest launched separate criminal proceedings against Facebook, alleging it was “criminally reckless” by not stopping criminals from using its social media platform to send scam advertisements to defraud Australian victims. 

He alleged scammers had been using his image to promote bogus cryptocurrency investments since March 2019. 

The case also alleged Facebook failed to create controls or a corporate culture to prevent its systems being used to commit crime. 

He also launched civil proceedings against Facebook in California in September. 

Mr Forrest said he had made many requests to Facebook to prevent his image being used by criminals scamming Australians. 

An initial hearing for the Australian case will be heard in the Western Australia Magistrates Court later this month. 

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