Facebook facing legal probe for ‘misleading’ Australian customers

Meta has been caught out allowing scammers to trick Australian customers, but they could be facing major consequences.

Meta could potentially be facing a legal probe for failing to stop scammers on its platform from tricking and taking money off customers.

The Australian Competition and Consumer Commission (ACCC) revealed last month it was investigating the social media giant, formerly called Facebook.

That investigation is now “very advanced” and the watchdog boss says the proliferation of scammers on Facebook and Instagram would constitute misleading of customers, which is a breach of consumer law.

News.com.au has previously reported on nearly a dozen Facebook and Instagram scams, primarily those targeting small business owners in Australia who had their business account hijacked.

The scam victims were unable to regain control of their accounts until media intervention, allowing the cyber criminal to trick their followers into giving away money in fraudulent schemes mostly around cryptocurrency, for months in some cases.

Meta is in particular coming under scrutiny for its policy around advertisements, with the social platform allegedly allowing scammers to pay for ads impersonating others.

ACCC chairman Rod Sims said to news.com.au in a statement: “The ACCC is investigating Meta Platforms, Inc. (formerly Facebook Inc.) for its role in publishing advertisements featuring Australian public figures which give the misleading appearance that those public figures have used or endorsed schemes that were in fact scams.”

Facebook is under scrutiny by an Australian watchdog. Picture: Olivier Douliery/AFP

Meta told news.com.au it rejected the allegations.

The ACCC’s investigation came hot on the heels of Andrew ‘Twiggy’ Forrest’s claims Meta should be criminally charged for failing to take down fake advertisements using his image.

The West Australian businessman alleged that the social media company had breached Australia’s anti-money laundering laws by failing to remove posts of scammers using his face to promote fake cryptocurrency investment opportunities spanning all the way back to March 2019.

In February 2022, Mr Forrest lodged proceedings in the Western Australia Magistrates Court.

Mr Sims said it did appear that Facebook had possibly breached some laws but didn’t specifically mention Mr Forrest’s case.

“We have a very advanced investigation into whether a large digital platform should have taken down scams when they knew they were scams,” Mr Sims told the ABC.

“I think if you know something’s a scam and yet you’ve got this platform, I think there is an issue there in terms of whether you’re misleading the users of your platform.

“Ultimately, that‘s the essence of consumer law, that you shouldn’t mislead consumers.”

Meta oversees Instagram and Facebook. Picture: Olivier Douliery/AFP

Meta responds

A Meta spokesperson rejected the allegations in a statement to news.com.au.

“We don’t want scams on our platforms – they violate our policies and are not good for our community,” they said.

“We use technology to detect and remove scam accounts, content and ads and work to get ahead of scammers’ attempts to evade our detection systems.

“While no enforcement is perfect, we continue to investigate new technologies and methods of stopping these scams, including taking legal action to stop the people behind them.

“We strongly encourage users to report suspected scams to us so we can investigate and take the appropriate action.”