The Australian Competition & Consumer Commission (ACCC) has called on Facebook and Google to intensify their crackdown on fake ads involving celebrities.
The ACCC’s message to the digital giants comes after it warned that people are increasingly being caught out by celebrity endorsement scams, with reports to its Scamwatch website rising 400 per cent so far in 2018, and losses growing by a staggering 3,800 per cent.
The consumer watchdog said these scams often appear as online ads or promotional stories on social media, or as seemingly legitimate, trustworthy website.
They include fictitious quotes and doctored or out-of-context images of the celebrity promoting a product such as skin care creams, weight loss pills, or investment schemes.
The scam works by consumers signing up for a ‘free trial’ for a product. As part of this process, they have to provide their credit card details.
However, the ‘free trial’ has strict terms and conditions such as having to return the product within a near impossible timeframe, and an automatically renewing subscription that is difficult to cancel. These terms are often only visible on the document that arrives with the product.
Aussie media personalities whose photos have been used in these types of scams include KIIS FM radio host Kyle Sandilands; TV presenters Lisa Wilkinson, Deborah Knight, Georgie Gardner and Sonia Kruger; and Shark Tank panel member Steve Baxter.
Scamwatch has received almost 200 reports in 2018, and losses totalling more than $142 000. People aged 45 and older accounted for 63 per cent of losses to these scams, and women are more likely than men to fall victim.
ACCC deputy chair Delia Rickard said most of the reports to Scamwatch involve these scam ads running on Google ad banners or as ads in Facebook’s news feeds.
“These tech giants must do more to quickly suspend ads, as every time consumers click on a scam ad, they are at risk of losing money,” she said.