An Australian mining magnate has accused the social media giant of failing to prevent scam ads using his name and image.
Last week, Meta was hit with criminal charges for the first time ever.
Australian billionaire Andrew Forrest filed a lawsuit in the Magistrates Court of Western Australia, saying he was taking action over a cryptocurrency scam that used his identity.
His case alleges that the social media company failed to prevent the publishing of fraudulent ads on Facebook that used his name and image to promote the scam, and breached Australia’s anti-money laundering laws for facilitating the spread of a crypto con.
Facebook was “criminally reckless”, Forrest alleged in a statement, because it did not take “sufficient steps to stop criminals from using its social media platform to send scam advertisements to defraud Australian users”.
The case will be heard from 28 March and, if successful, Facebook could face fines or be forced to change its advertising policies.
Who is Andrew Forrest?
Forrest is one of Australia’s richest men and chair of iron ore giant Fortescue Metals Group. He started that business 10 years after founding his first mining company, Anaconda Nickel (now Minara Resources).
Scam ads using his image to seemingly promote investment plans first appeared on Facebook in 2019.
At the time, Forrest called out Facebook for facilitating cryptocurrency scams that fraudulently used his identity, and warned company boss Mark Zuckerberg that innocent users were being misled and conned in “abhorrent” schemes.
Forrest went on to file a civil lawsuit last year in the US state of California, where Meta is headquartered. The pending case alleges that the company “knowingly profits from this cycle of illegal ads”.
What’s the issue here?
Scam ads using images of celebrities to promote products or investments have been seen on Facebook all around the world.
The UK’s National Cyber Security Centre warned in 2020 that it had foiled a growing number of these online schemes, taking down more than 300,000 URLs linking to investment scams with fake celebrity endorsements.
Last year, a host of big names urged the UK government to hold tech giants responsible for bogus ads that use their faces to lure users into scams. While legal action has been taken against Facebook by figures such as Martin Lewis in the UK and Miriam O’Callaghan in Ireland, Forrest is the first to pursue a criminal case.
“I’m concerned about innocent Australians being scammed through clickbait advertising on social media,” Forrest said in his statement last week. “I’m acting here for Australians, but this is happening all over the world.”
Forrest added that he wants social media companies to “use much more of their vast resources and billions of dollars in annual revenue to protect vulnerable people”.
What does Meta say?
Meta has not commented on the lawsuit specifically, saying it is an “active legal matter”. But in a statement to the media, the company said that scam ads violate its policies.
“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,” a Meta representative said.
The lawsuit came during a bad week for the company.
Meta reported lower-than-expected profits in its fourth-quarter results, and revealed that Facebook’s daily active users had fallen for the first time in the platform’s 18-year history.
Andrew Forrest. Image: Chatham House via Wikimedia Commons (CC by 2.0)
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