ACCC says Facebook and Google must do more to stamp out celebrity endorsement scams as losses soar

AN online story about Karl Stefanovic’s supposed erectile dysfunction was totally bogus - but fake celebrity endorsements are on the rise, and the consumer watchdog has just revealed how much they’re costing us.

THE consumer watchdog says there’s been a “staggering” increase in losses due to fake celebrity endorsement scams.

Financial losses caused by the scams have risen 3800 per cent this year, the Australian Competition and Consumer Commission said today. The number of reports to its Scamwatch service are up 400 per cent.

“The growth in these scams is very concerning, particularly as over half the reports we received included a financial loss. Most people lost between $100 and $500 and in one case, a victim lost more than $50,000 through fake celebrity endorsement of an investment scheme,” ACCC deputy chair Delia Rickard said.

The ACCC today joined the Federal Government in flaying Facebook and Google for exposing Australians to the scams.

“These tech giants must do more to quickly suspend ads, as every time consumers click on a scam ad, they are at risk of losing money,” Ms Rickard said.

The latest high-profile figure targeted by false claims is Karl Stefanovic.

Fake news stories falsely claiming Karl Stefanovic is behind a new erectile dysfunction treatment. Picture: Supplied

In a new fake ad Stefanovic is said to have taken indefinite leave from Channel 9 to pursue the development of a new erectile dysfunction treatment after suffering the condition in an article dressed up to look like it is from Entertainment Weekly.

Consumers of legitimate news stories on sites including The Guardian are being served an ad by Google which links to the fake Stefanovic story.

In another new example, Jessica Rowe is falsely said to have chosen to leave her role on Studio 10 because she was so enamoured with a diet pill. To rope readers in, the ad linking to the fake story uses a photoshopped image of Rowe with a black eye.

Carrie Bickmore, Sonia Kruger and Deborah Knight have also been ensnared in digital deceptions.

TV presenter Deborah Knight has been swept up in a fake Facebook news scam. Picture: Supplied

The scams entice readers to hand over credit card details for postage on “free samples” which

never arrive. Their credit cards are then charged up to $525 for the non-existent items.

Cove Legal principal Roger Blow said Stefanovic’s fake advert could be defamatory, as well as misleading and deceptive conduct. Tech giants publishing it could potentially be held responsible for the damage it caused.

“These celebrities should be getting lawyers the second those adverts appear to write to Facebook and Google to put them on immediate notice,” he said.

The fake Stefanovic ad is similar to one that led Eddie McGuire in April to vow in to sue Facebook. It was made to look as if it came from GQ Magazine.

McGuire’s lawyer James Naughton of Gordon Legal yesterday told News Corp Australia “we are still investigating the case for Eddie”.

A fake Facebook Ad featuring Carrie Bickmore. Picture: Supplied/Instagram

The scammers had used technology to mask their internet protocol address, Mr Naughton said, and it appeared the fake stories had been served anonymously from Panama.

Communications minister Mitch Fifield said the community expected Google and Facebook to do more to stamp out the rorts.

“Online shopping scams such as those featuring fake celebrity endorsements are disgraceful and dodgy schemes designed to hoodwink honest Australian consumers,” Senator Fifield told News Corp Australia.

“The community also rightly expects digital platforms to take greater responsibility and more decisive action to deal with scams and misleading advertisements on their sites.”

Minister for Communications Mitch Fifield. Picture: AAP

A Google Australia spokesman said it had “zero tolerance for ads that mislead or trick users into interacting with them and have clear policies prohibiting these practices. When we find ads that violate our policies, we remove them.”

Google removed 7000 instances of “tabloid cloaking” in 2017, up from 1400 in 2016, he said.

Facebook said its guidelines state ads must not contain deceptive, false, or misleading content, including deceptive claims, offers, or business practices.

“To enforce our terms and policies, we have invested significant resources in developing a robust advertising review program that includes both automated and manual review of ads,” Facebook ANZ’s communications head Antonia Sanda said.

Stefanovic declined to comment. Rowe has described the doctoring as “disgusting”.