Consumer watchdog to sue Facebook’s Meta over ‘disgraceful’ scam ads

Australia’s consumer watchdog is taking Facebook to court over scam ads featuring Dick Smith, David Koch and Mike Baird.

Australia’s consumer watchdog is suing Facebook’s parent company Meta, claiming it has failed to take action against scammers on the platform.

The ACCC alleges Meta engaged in false, misleading and deceptive conduct by publishing scam advertisements featuring prominent Australians.

It claims the advertisements used images of businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird to promote fake cryptocurrency investments and other money-making schemes.

In one instance, the ACCC said a victim lost $650,000 to a scam.

David Koch was featured in one of the scam advertisements. Picture: Jonathan Ng

“This is disgraceful,” chair Rod Sims said.

The ACCC alleges Meta was aware of the scam ads and did not take sufficient action to address the issue.

“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” Mr 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.”

Mr Simms added Meta failed to take sufficient steps to stop the ads, even after those included in them complained to the company that their name and image was being used to scam customers.

The ACCC alleges Meta did not do enough to stop the scams. Picture: Kirill Kudryavtsev / AFP

In a statement, a Meta company spokesman confirmed it intended to defend the proceedings.

“We’ve co-operated 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,” they said.

“We are unable to comment further on the detail of the case as it is before the Federal Court.”

Australian mining magnate Andrew “Twiggy” Forrest launched criminal proceedings against the company in February, alleging the platform was “criminally reckless” by failing to take down scam ads using his image.

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

An initial hearing into the case will be held in the Wert Australian Magistrates Court later this month.