Facebook (Meta) facing criminal charges over crypto scams

[Spotty]

Summary

Facebook is facing criminal charges in Australia for their role in promoting cryptocurrency scams on their social media platform. It is alleged that Facebook (Meta) has committed offences against Australia's anti-money laundering laws and that Facebook was criminally negligent in not preventing the scam advertisements.

 

The criminal charges were launched by Andrew Forrest an Australian mining billionare who alleges to be a victim of these scams which have been using his image (along with other celebrities and prominent figures) to promote the investment scams on Facebook. Forrest is also currently suing Facebook in a separate civil case in California, USA for failing to remove scam advertisements using his image.

 

Quotes

Quote

The Australian billionaire Andrew Forrest has launched criminal proceedings against Facebook alleging the tech giant breached federal anti-money laundering laws by not cracking down sufficiently on scam ads that used his image.

 

The action in the Western Australia magistrates court is the first time Facebook has faced criminal charges anywhere in the world, Forrest said on Thursday.

 

The charges allege Facebook was criminally reckless by not taking sufficient steps to stop criminals from using its social media platform to send scam advertisements that aimed to defraud Australian users.

 

It is alleged the scam advertisements – which used Forrest’s image and purported to promote cryptocurrency investment schemes – have appeared on Facebook since March 2019.

The Australian legal action comes after Forrest asked Facebook to prevent his image from being used to scam Australian users – including an open letter to Mark Zuckerberg in November 2019.

 

Facebook's Response:

Quote

A spokesperson from Meta said the company was unable to comment on the court action, but provided a broader statement about scams on Facebook.

"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," a spokesperson said.

"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.

"We're committed to keeping these people off our platform." 

 

 

My thoughts

Scam advertisements on Facebook are rather common (a good reason to use an Adblocker, Linus!). Facebook profits from selling these scam advertisements and does little to nothing to ensure what is advertised on their platform is legitimate. Facebook needs a good kick up the ass to get these scam ads off their platform. Facebook needs to do more to verify advertisements before they are published and promoted on Facebook and needs to be quicker to detect and remove malicious advertisements.

 

I've also seen a lot of posts on this forum about "Is this website selling RTX 3080 GPUs for $299 legit?" (obvious scam websites) and more often than not they found the website through ads on Facebook or Instragram.

 

It's going to be interesting seeing the argument over whether or not Facebook was involved in money laundering for their role in promoting these scams, but there's no doubt a company the size of Facebook could do more to prevent these scams from being advertised on their platform. Facebook has been aware of the problem for several years now and it is still an ongoing problem.

 

I'm not sure how far a criminal case in the magistrates court of Western Australia launched by a mining billionaire is going to go (I would have preferred this to have been launched by an Australian watchdog like the ACCC and I'm surprised that they haven't already), and I'm sure this is at least in part to help Forrest's civil case in America, but at the very least hopefully the publicity forces Facebook to do more to prevent these scam advertisements on their platform. The initial hearing is set for the 28th of March so we'll see where it goes then.
 

 

Sources

https://www.theguardian.com/australia-news/2022/feb/03/andrew-forrest-launches-criminal-action-against-facebook-over-scam-ads-that-used-his-image (quote source)

https://www.abc.net.au/news/2022-02-03/andrew-twiggy-forrest-launches-criminal-proceedings-facebook/100800630 (facebook's response)

 

[Spotty]

If anyone finds the court filings for the case please post a copy. I tried having a look but can't seem to find it and none of the news articles I checked had a copy of the court documents linked.

There's also a video statement from Andrew Forrest about the charges here but what is said is mostly covered in the news articles anyway. I've never heard of this website before but I can't seem to find the video posted anywhere else.

https://www.bandt.com.au/andrew-forrest-launches-criminal-proceedings-against-facebook-over-clickbait-advertising/

[TempestCatto]

I'd argue most of the ads on their sites are scams. But I guess that's a different topic for a different day.

[WhitetailAni]

Is Facebook or Meta, their parent company, facing charges?

[Spotty]

2 minutes ago, FakeKGB said:

Is Facebook or Meta, their parent company, facing charges?

Meta, I guess. All of the news articles refer to it as Facebook though, probably gets more clicks. I updated the title to put Meta.

[Quackers101]

so the cryptopocalypse has started now? when is adapocalypse 3.0 going to start?

[poochyena]

How is Facebook to know if a website is a scam or not? Going to be hard to prove they know they promote scam sites, i'd imagine.

[Arika]

39 minutes ago, Spotty said:

alleging the tech giant breached federal anti-money laundering laws

that's rich coming from a mining billionaire.

[SorryBella]

39 minutes ago, Arika S said:

that's rich coming from a mining billionaire.

Id say "let dog eat dog".

[Spotty]

41 minutes ago, poochyena said:

How is Facebook to know if a website is a scam or not? Going to be hard to prove they know they promote scam sites, i'd imagine.

True, to some extent. The case might not need to prove that Facebook promoted the ads knowing that they were scams, but rather just that they failed to act appropriately to prevent or remove them. Having inadequate methods of preventing scam/illegitimate ads in the first place or not having appropriate ways to report ads for scams or not removing them in a timely manner might all be enough to justify the negligence accusation. If Facebook is being made aware of scam advertisements and is not removing them from the platform then yeah, I would say that is negligence.

 

Andrew Forrest has previous/separate ongoing action with Facebook demanding they prevent scam advertisements using his likeness. Facebook should have the technical means to prevent those specific scam advertisements using his likeness but has failed to do so (and this has allegedly been going on since March 2019).

 

My guess is the court case will go like "Facebook isn't doing enough to remove scam ads on their platform, here's proof of times when scam ads have been reported to them and they haven't been removed in a timely manner" and Facebook will respond with "Here's statistics on how many scam ads we've pulled from the platform proving that we are working towards removing scams".

 

There's probably always going to be some scam advertisements making its way on to the platform no matter what Facebook does but I guess it comes down to how proactive they are in preventing them and how they respond to requests to remove them. Facebook does have a responsibility for the ads they publish on their platform and they can't just bury their heads in the sand and say "Sorry we can't hear you over all the money we're making from selling ads"

Edited February 3, 2022 by Spotty

[TetraSky]

Quote

"The Australian billionaire Andrew Forrest has launched criminal proceedings against Facebook"

 

So some super rich guy decided he didn't have enough money and thought suing Meta for some would be easy.

[Brooksie359]

40 minutes ago, TetraSky said:

 

So some super rich guy decided he didn't have enough money and thought suing Meta for some would be easy.

To be fair I would be passed too if Facebook was put up advertising on its website with my face on it without my consent and even more so when it's related to scams. I think the bigger issue for him is it probably isn't good for his image or credibility to be on such advertisements as some might think he is involved in the scam. 

[Kisai]

1 hour ago, TetraSky said:

 

So some super rich guy decided he didn't have enough money and thought suing Meta for some would be easy.

Nope.

 

"Some rich guy who didn't want his appearance to be misappropriated, and hates meta/facebook enough is suing Meta"

 

You have to remember that any celebrity, not just film/music people, generally have the clout and access to legal resources to employ going after anyone they want, for whatever slight they feel was towards them.

 

Rich people are far more likely to engage in "brand" wars over the use of their name or photos, because they tend to be narcissists.

 

Just like how people who manage companies tend to be psychopaths. They're so detached from the reality of what their company actually does, that they treat their customers, or the staff below them with contempt (see Jack Dorsey, and Mark Zuckerberg), and ignore advice to clawback the harm the company is doing do their customers. But to them, it's just a problem that can be swept under the rug with money.

 

If you've been living under a rock since 2018, both facebook and twitter have been absolutely flooded with nft/crypto-scams, and facebook and twitter have done little about it, because their CEO's already drank the crypto-koolaid. They don't see anything wrong.

 

 

[Dirtyshado]

ACCC has made a commented on the case, confirming they are also investigating Facebook's issues with online fraud.

FYI. The Australian Competition and Consumer Commission is a business and consumer law regulator who is most famous in tech world for suing and beating Valve and Bethesda over refund policies, and nearly causing Facebook and Google to quit Australia while it was drafting rules for news linking.

 

Quote

“While Mr Forrest’s proceedings concern similar advertisements to those that the ACCC is investigating, the ACCC’s investigation is separate and concerns different questions of law,” ACCC chair, Rod Sims, said. “Mr Forrest’s proceedings have been brought under the Commonwealth Criminal Code. The ACCC will continue to consider whether Meta Platforms’ conduct raises concerns under the Australian Consumer Law.

 

My Comment: The hardest thing for Facebook to prove is they are doing everything in their power to do so... given Twiggy's name and face are being used, and Facebook has text and facial recognition technology that scans everyone's posts and pictures, its going to be hard for them to prove they can't police ever advertisement.  You verify their payments, why can't you verify the ad?

 

The idea Facebook could be charged for receiving payment to facilitate criminal activity is a fun one... cause in Australia there is a no limit fine on that one. Facebook doesn't want to open itself to a cascade of billion dollar fines after taking such a huge hit to their stock value.

[mr moose]

7 hours ago, poochyena said:

How is Facebook to know if a website is a scam or not? Going to be hard to prove they know they promote scam sites, i'd imagine.

Because they were told it was happening.  It's in the fucking article.

 

Quote

The criminal proceedings come after Mr Forrest requested Facebook prevent his image being used to promote cryptocurrency schemes, including in an open letter to Facebook CEO Mark Zuckerberg in November 2019.

 

6 hours ago, TetraSky said:

 

So some super rich guy decided he didn't have enough money and thought suing Meta for some would be easy.

No.  He has a legitimate claim here.   And to be honest if people like him don't hold facebook to account,  how the fuck are we mere plebs supposed to get justice when it happens to us?

 

 

I am getting quite tired of these companies allowing their platforms to knowingly be used for criminal activities.  In the old days, if you knowingly helped a criminal to either carry out the activity or to escape you were an accomplice and charged accordingly    Facebook, google, et al, are knowingly allowing their platforms to be used for criminal purposes,  That to me screams accomplice.    I really hope the day comes when Facebook is no longer viable due to being held to account for their complacency and lack of duty of care.

[Kisai]

5 hours ago, mr moose said:

   Facebook, google, et al, are knowingly allowing their platforms to be used for criminal purposes,  That to me screams accomplice.    I really hope the day comes when Facebook is no longer viable due to being held to account for their complacency and lack of duty of care.

I one had a supervisor at the "worlds largest auction" site tell me to not take down certain things without it first being reported because "money from fees", and I'm like... OKAY THEN. So I self-reported the pirate games, consoles, mod chips, flash carts, counterfeit pokemon carts,  etc, and then took them down. That's what I would do every morning before I started a shift, report everything. If the items were still up by the end of the shift, I'd then take them down myself, having already reported them more than 8 hours ago. Have I mentioned how everyone cheats their metrics at this company?

 

These companies do have people who care, just the people above them either don't, or won't. I've encountered this kind of friction with every company, on both sides of the customer interaction. You get the dell techs who just want to solve the problem, and then you get the outsourced customer support in the Philippines or India who literately has no capability to do anything but push a button and argue with you. Just look at the newegg problem GamersNexus had happen. 

 

Honestly at this point, I'm so disillusioned with companies that outsource their core business, that I just can not be bothered to care about any kind of "loyalty" to that company.

 

If something better and safer than Twitter and Facebook comes along, everyone will jump ship, but as long as these sites are beholding to ad revenue and commission fees for accepting the ads, they will never have an incentive to do the right thing.

 

[wanderingfool2]

7 hours ago, mr moose said:

I am getting quite tired of these companies allowing their platforms to knowingly be used for criminal activities.  In the old days, if you knowingly helped a criminal to either carry out the activity or to escape you were an accomplice and charged accordingly    Facebook, google, et al, are knowingly allowing their platforms to be used for criminal purposes,  That to me screams accomplice.    I really hope the day comes when Facebook is no longer viable due to being held to account for their complacency and lack of duty of care.

Knowing and allowing are two different things though.

 

I don't think they want those advertisements on their sites, but it starts getting an issue when you have extremely large teams where the orders get scrambled or can't effectively be executed because of a large team.  A hypothetical would be, oh we can implement this to "stop spam".  It goes up to higher management to get approval, there is a meeting but questions get asked what the effect would be.  It gets sent back down to do an analysis, and sent back up.  It then gets sent back down because it needs to be re-worked to not catch the legitimate ads.  Work is done on that, but then it doesn't really stop spam because the idea was watered down (or the spam has already evolved).

 

Although, this is talking about Facebook which also thought it was a good idea to intentionally promote ads using friends profiles (it must have been nearly 10 years ago now though) endorsing products.  So Facebook might be a different ball game.  I think for Google they might be too caught up in letting their NN's and AI learn and try catching it...too much reliance on general technology than just putting a single smart person in charge of the spam ad department and just letting him scroll through samples and write things that will flag ads.

[poochyena]

8 hours ago, mr moose said:

Because they were told it was happening.  It's in the fucking article.

But that doesn't describe a scam, it describes something along the lines of "misappropriation of likeness". An ad being a scam and an ad stealing an image of a person are two separate things. A company could be doing both at the same time, but they are separate charges.

[grg994]

"All crypto promos are scam but some crypto promos are more scammy then others"

[mr moose]

2 hours ago, wanderingfool2 said:

Knowing and allowing are two different things though.

 

I don't think they want those advertisements on their sites, but it starts getting an issue when you have extremely large teams where the orders get scrambled or can't effectively be executed because of a large team.  A hypothetical would be, oh we can implement this to "stop spam".  It goes up to higher management to get approval, there is a meeting but questions get asked what the effect would be.  It gets sent back down to do an analysis, and sent back up.  It then gets sent back down because it needs to be re-worked to not catch the legitimate ads.  Work is done on that, but then it doesn't really stop spam because the idea was watered down (or the spam has already evolved).

 

Although, this is talking about Facebook which also thought it was a good idea to intentionally promote ads using friends profiles (it must have been nearly 10 years ago now though) endorsing products.  So Facebook might be a different ball game.  I think for Google they might be too caught up in letting their NN's and AI learn and try catching it...too much reliance on general technology than just putting a single smart person in charge of the spam ad department and just letting him scroll through samples and write things that will flag ads.

I really don't care how big they are, if they are too big to abide the law then they shouldn't be allowed to operate.    Inability to abide the law is not an excuse for me or my small business. 

1 hour ago, poochyena said:

But that doesn't describe a scam, it describes something along the lines of "misappropriation of likeness". An ad being a scam and an ad stealing an image of a person are two separate things. A company could be doing both at the same time, but they are separate charges.

It's hard to admit you didn't read the article eh?

[poochyena]

18 minutes ago, mr moose said:

It's hard to admit you didn't read the article eh?

i read the article

[mr moose]

1 hour ago, poochyena said:

i read the article

And completely missed the several times they mentioned facebook was informed of the infringing ads that needed to be removed.     Not knowing what the ads are for or which website they direct people to does not justify leaving up infringing ads. 

 

 

[poochyena]

30 minutes ago, mr moose said:

And completely missed the several times they mentioned facebook was informed of the infringing ads that needed to be removed.

I didn't miss that. I stand by my comment.

[wanderingfool2]

19 minutes ago, mr moose said:

And completely missed the several times they mentioned facebook was informed of the infringing ads that needed to be removed.     Not knowing what the ads are for or which website they direct people to does not justify leaving up infringing ads. 

 

 

Can't really tell though until the actual details of the case are listed.  Facebook could very well use the excuse that the advertisers claimed they had the authorization to utilize the photos they chose.  Not condoning what happened, and given it's Facebook I really doubt they even bothered looking at the complaint...but to assume everything being said by a person is going to be true without fault won't work.

 

Examples being someone claiming it's them (when it's not) to get an ad removed (of let's say a competitor)...because things like that sadly also happen quite frequently.  Other examples being similar things like the Nirvana Baby.  At a certain point it becomes an issue that it's contractual law between the other parties.

 

1 hour ago, mr moose said:

I really don't care how big they are, if they are too big to abide the law then they shouldn't be allowed to operate.    Inability to abide the law is not an excuse for me or my small business. 

Scale can play a huge role, as the "smaller businesses" get away with things that large ones don't.  You end up with the large companies who try complying with laws, but laws are complex and it's not as simple as you seem to think for larger companies to eliminates issues.

 

All you have to do is look at the amount of spam in Youtube comments, and their inability to catch some of the simple things.  They know spam is an issue, and they do attempt to get rid of it but a company the size of Facebook, Google and such isn't as easy to get some "simple" things done because there is so much added bureaucracy that needs to be done (some likely even because they are publicly traded company)

[mr moose]

2 hours ago, poochyena said:

I didn't miss that. I stand by my comment.

Your comment is both wrong and makes no logical sense.

 

2 hours ago, wanderingfool2 said:

Can't really tell though until the actual details of the case are listed.  Facebook could very well use the excuse that the advertisers claimed they had the authorization to utilize the photos they chose.  Not condoning what happened, and given it's Facebook I really doubt they even bothered looking at the complaint...but to assume everything being said by a person is going to be true without fault won't work.

 

He sent an open letter to zuckerburg in 2019 clearly stating they did not have permission and were scams.  We don't need the details of what was submitted int he case to know that they were told and did nothing.  The whole reason for this legal action is exactly because facebook did not listen to him or they thought he was lying about giving advertisers rights to his own image.  Either way that is a gross failure of duty.

 

https://www.smh.com.au/business/companies/time-for-scam-free-social-media-andrew-forrest-s-letter-to-facebook-chief-20191111-p539af.html

 

 

 

 

2 hours ago, wanderingfool2 said:

Examples being someone claiming it's them (when it's not) to get an ad removed (of let's say a competitor)...because things like that sadly also happen quite frequently.  Other examples being similar things like the Nirvana Baby.  At a certain point it becomes an issue that it's contractual law between the other parties.

I think it is pretty obvious it was him.   It's also pretty obvious they are scams.  

 

2 hours ago, wanderingfool2 said:

Scale can play a huge role, as the "smaller businesses" get away with things that large ones don't.  You end up with the large companies who try complying with laws, but laws are complex and it's not as simple as you seem to think for larger companies to eliminates issues.

Again, if they can't comply with the law then stop providing the service.   This isn't exactly a complicated issue,  they allowed an ad to be posted that was explicitly reported as fraud.   This isn;t the first time facebook have been in trouble for not removing posts and ads, there was a girl who's ex posted porn of her on facebook,  she reported and facebook did nothing, she took them to court and all of a sudden facebook worked out how to remove the posts and settled the case.  The only unfortunate thing about when cases settle like this is the details are hidden from the public so we don't know how much they paid her or any other conditions required to end the case.

 

2 hours ago, wanderingfool2 said:

All you have to do is look at the amount of spam in Youtube comments, and their inability to catch some of the simple things.  They know spam is an issue, and they do attempt to get rid of it but a company the size of Facebook, Google and such isn't as easy to get some "simple" things done because there is so much added bureaucracy that needs to be done (some likely even because they are publicly traded company)

 

Back to what I said before, inability to stop something is not an excuse to let it happen.