Facebook and Google could be forced to pay millions to scam victims under ombudsman scheme

Australians lose millions of dollars to scam ads on social media every month, but a new scheme could hold Facebook and Google accountable.

Australians scammed out of millions of dollars on social media could be compensated by Facebook, Instagram or Google in future as the Federal Government considers whether to appoint an ombudsman to hold the tech giants accountable.

The recommendation from the Australian Competition and Consumer Commission (ACCC) came after it identified social media scams had more than doubled over the past four years, and cost Australians more than $15.7 million last year.

Romance and dating scams on social media, for example, have robbed Aussies of more than $4.6 million this year alone.

But experts predicted the multinational companies would not take the change “lying down,” and would fight moves to take responsibility or compensate users.

The news came as the Federal Government opened public consultation into the ACCC’s Digital Platforms Inquiry today, revealing it would consider responses to the report’s 23 recommendations until October 24.

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Tech giants including Facebook could be forced to compensate Australians that fall victims to scams on social media. Picture: Brett Wortman/Sunshine Coast Daily

The Government is due to respond to the recommendations later this year, and could act on advice to appoint an ombudsman to respond to consumer scam complaints.

The inquiry found scams were soaring on social media in Australia, with complaints rising 188 per cent between 2014 and 2018, and losses up 165 per cent.

“The rise of digital platforms has enabled the growth of online scams, resulting in significant losses for consumers and small businesses,” the report found.

“The ease with which scammers use digital platforms to conduct scams, particularly romance scams, investment scams, and advertisements containing false representations, is especially concerning.”

The ACCC, which predicted “consumer harm” would continue to rise, recommended an independent ombudsman be appointed to field consumer complaints, compel tech giants to remove scam advertisements, and “order compensation”.

The move could cost digital platforms — mainly Facebook and Instagram — millions of dollars each year.

The tech giants aren’t going to take the compensation proposal lying down, warns an expert in the field.

But Swinburne University social media director Dr Belinda Barnet said the companies were likely to fight any reform that forced them to take responsibility for content on their platforms.

“They’re not going to take it lying down,” she said.

“It’s an added layer of responsibility.

“They’ll have to be far more prompt in their response. It would require fundamental changes on their behalf.”

Dr Barnet said Government should pursue the recommendation regardless as it was currently “extremely difficult” to contact Facebook or Google “and speak to a human if you’ve been scammed,” and the companies were often slow to react to reports of harmful content.

Removing the scams, including a growing number of fake celebrity endorsements for everything from face cream to Bitcoin, could prevent large numbers of Australians being robbed online, Dr Barnet said.

“Scams are a growing concern and if they can be held accountable for scams published using their platform, excellent,” she said.

Originally published as Facebook and Google could be forced to pay millions to scam victims under ombudsman scheme