Andrew ‘Twiggy’ Forrest takes on Facebook in court over scam ads

The billionaire alleges the social media giant funnelled users to cryptocurrency scams that used his name to defraud victims.

Andrew Forrest says ‘Facebook has shown little appetite to self-regulate or take basic steps to protect Australians from the misuse of its platform by crooks and scammers’. Picture: David Swift

Fortescue Metals chairman Andrew Forrest is bringing criminal charges against Facebook, alleging the social media giant funnelled users to cryptocurrency scams that used his name to defraud unsuspecting victims.

In a highly unusual lawsuit, one which required the approval of the Attorney-General’s Department, Dr Forrest accuses Facebook of breaching Australia’s money-laundering laws. The West Australian Magistrates Court will first hear the matter in late March.

Dr Forrest is one of several high-profile Australians including Chris Hemsworth, Waleed Aly and David Koch whose images and names have been used to endorse a boom in cryptocurrency scams on Facebook since 2019.

In a separate lawsuit lodged in California, the businessman accuses Facebook of aiding and abetting fraud, alleging the company “knowingly profits from this cycle of illegal ads”. Facebook failed to create controls or a corporate culture to prevent its systems being used to commit crime, he claims.

“These scenarios played out in the underlying scam which used Dr Forrest’s name, likeness, and reputation to find victims, who often reported being swindled after believing Dr Forrest was actually endorsing the investment scheme,” documents filed with the California courts read. One Australian victim, according to the filings, lost $US670,000 ($952,000) after falling for a fake endorsement from the mining magnate.

“While Dr Forrest does not know the precise number or identities of the individuals defrauded by reason of this vicious scam, the scope of the harm is vast. The fraudulent scam facilitated by Facebook has defrauded victims out of millions of dollars,” it reads.

If found guilty by the Australian courts, Facebook could face fines and be compelled to change the way its advertising works.

Dr Forrest said he wanted Facebook to start using its resources, acquired largely through advertising, to do more to protect vulnerable people targeted by criminal syndicates.

“I’m doing this on behalf of innocent Australians who don’t have the resources to take on companies like Facebook … The same people who are being scammed and many of whom have seen me falsely featured on Facebook advertisements,” he said.

“I want social media companies to use more of their vast resources and billions of dollars in annual revenue to protect vulnerable people who are targeted and fall victim to these scams.

“Social media is part of our lives, but I want more to be done to ensure fraud on social media platforms is eliminated or significantly reduced.”

A spokeswoman for Facebook’s parent company, Meta Platforms, told The Australian:“We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community.

“We take a multifaceted approach to stop these ads, we work not just to detect and reject the ads themselves but also block advertisers from our services and, in some cases, take court action to enforce our policies,” she said.

“We’re committed to keeping these people off our platform.”

Dr Forrest’s complaint lodged with the Superior Court of California alleges that the precision with which Facebook is able to monetise user data based on continued engagement has been a “leading but foreseeable contributor to the proliferation of illegal advertisements, “fake news” and other unwanted internet material”.

One of the fraudulent posts used on social media.

“The fraudulent scam facilitated by Facebook has defrauded victims out of millions of dollars.

“In an attempt to save his reputation and likeness, and dissociate himself from this fraudulent scheme, Dr Forrest has spent hundreds of thousands of dollars investigating and defending himself and his business reputation and likeness, increasing his personal protection from justifiably angry fraud victims, and distancing himself from the scam of which he was not associated and played no part.”

The billionaire said the scam advertisements using his image and claiming that he is promoting crypto investment schemes date back to at least March 2019.

“Why is fraud so prevalent on Facebook’s advertising platform?” Dr Forrest asked while discussing his Australian court action on Wednesday – one of few criminal actions taken by a private individual.

“Facebook has shown little appetite to self-regulate or take basic steps to protect Australians from the misuse of its platform by crooks and scammers, so I’ve been left with no other option than to take this action.

“The criminal scammers are mostly located overseas and can’t be easily tracked down. The best way to protect Australians is to deter Facebook – through a criminal prosecution – from allowing itself to be used as an instrument of crime.

“I urge every Australian not to trust advertisements appearing on Facebook which urge them to invest your money.”

The Australian Federal Police said in December that the pandemic had sparked a surge in cryptocurrency scams, with Australians losing more than $100m to the scams in 2021. Figures from the Australian consumer watchdog and the AFP found that losses between January and November increased by 172 per cent, with cryptocurrency the most common type of investment scam.

“Investment scams are more prevalent than ever, and scammers are capitalising on interest in cryptocurrency in particular,” Australian Competition & Consumer Commission chairwoman Delia Rickard said in August. A proposed amendment to last year’s News Media Bargaining Code would have allowed the ACCC to monitor Facebook and Google’s news distribution algorithms, but it did not make the final legislation.

A date for the California civil case, in which Dr Forrest is seeking injunctive relief and other penalties, is yet to be set.