ACCC Takes Facebook to Task Over Fake Crypto Ads
In a press release on Friday (March 18, 2022), the Australian Competition and Consumer Commission (ACCC) alleged that adverts on Facebook which promoted crypto investment ventures, and featured famous Australians, were likely misleading users into believing that such ads were promoted by the prominent public figures.
Some of the well-known Australians featured in the cryptocurrency ads included television presenter David Koch, businessman Dock Smith, and the former Premier of New South Wales Mike Baird. However, such promotions were fake, as none of the featured personalities endorsed or approved them.
Furthermore, the advertisements contained links to fake media articles that contained a quote attributed to personalities endorsing a cryptocurrency scheme. Users who signed up were later contacted by scammers who managed to convince them to deposit funds into the fraudulent venture.
Although Meta earlier stated that the company was committed to detecting and preventing scams, while ensuring overall safety on the social media platform, the ACCC stated that Meta failed to stop the promotion of these fake ads even after complaints from several celebrities.
A statement from Rod Sims, the ACCC Chair, 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.”
Consequently, such promotions have caused huge losses to unsuspecting victims and also damaged the reputations of the well-known figures falsely connected with the ads. According to the competition regulator, a victim lost over $650,000 after falling for one of such fake investment schemes.
Earlier in February, Australian billionaire Andrew Forrest launched a criminal case against Meta, stating that the platform failed to stop cryptocurrency investment promotions using his name and image. Meanwhile, the ACCC is pressing for injunctions, declarations, and penalties.
Regulators Going After Crypto Ads
Regulators across the globe have continued to issue warnings to consumers about investing in crypto, which they say is volatile and risky. Also, there have been warnings against crypto investment schemes that promise hyperbolic returns, with regulatory bodies stating that retail investors could lose all their funds.
Meanwhile, cryptocurrency adverts have recently become a priority for regulatory watchdogs seeking to protect consumers. The UK Advertising Standards Authority (ASA), which maintains strict oversight on cryptocurrency advertising, banned several crypto campaigns in recent times, claiming that they were irresponsible and misleading.
Recently, ASA sent enforcement notices to over 50 cryptocurrency companies, asking them to review their ads and ensure the promotions comply with the necessary rules. The UK advertising regulator warned that firms have until May 2, 2022, to comply with the new guidelines or risk facing sanctions.