Scam Ads ‘Rife’ on Digital Platforms as Social Media Platforms Fail to Act

social media, marketing, facebook-6134993.jpg
A hand coming out of a mobile phone and holding a megaphone pointed at flags of social media platforms.

Original media release from CHOICE (27/09/2023)

With all their endless resources and revenue, shouldn’t the biggest digital platforms have safeguards in place to prevent scammers from posting fake ads? The fake ads, of course, lead to fake websites that have been set up to steal our money. 

Whatever hurdles Google, Facebook and Instagram have in place, they’re not stopping the scammers. 

So it’s no surprise that more than six out of 10 Australians think social media and digital platforms are not doing enough to protect us from scams, as recent CHOICE research revealed. 

CHOICE finds scam ads rife on local platforms

Over the past few weeks the CHOICE anti-scams team has been trawling the internet, and we’ve had no trouble finding ads on Google, Facebook and Instagram that have all the hallmarks of promoting scam shopping websites. 

The fake sites spoof the websites of popular Australian retailers, and it’s often very hard to tell the genuine from the fraudulent. 

And the ads can stay live for a long time. We found a scam ad on Google for the women’s clothing retailer Decjuba on 23 July, and it was still running when we last checked on 18 September.

The investigation also found issues with Google’s own policies to prevent scams because some advertisers do not appear to be verified before they publish ads.

The fake sites spoof the websites of popular Australian retailers, and it’s often very hard to tell the genuine from the fraudulent

After we contacted Google Australia about the issue, the company informed us it had taken ‘appropriate action’ on the scam activity we brought to its attention, including fake ads for Country Road, Peter Alexander, Seed Heritage and Decjuba. 

Yet we found scam ads on Google for Decjuba and Peter Alexander seven days later.

We also continued to find fake ads for Sportsgirl, TK Maxx, Princess Polly, Lorna Jane, Kathmandu and others.

Fake ads often have telltale signs, such as misspellings and offers too good to be true. But when they’re ‘sponsored’ platform users can easily miss this. (Source: ACCC)

Linda’s story: ‘I think I’m pretty savvy’ 

Even the savviest of consumers can fall prey. 

When Linda, a former CHOICE policy adviser, recently went looking for a particular brand of wine on Google, an ad popped up for a boutique retailer where she’d shopped before. 

“I’m pretty cautious when it comes to giving away my personal information,” Linda says. “And I think that I’m pretty savvy when it comes to spotting scams.” 

She clicked on the ad, which took her to what she thought was the wine seller’s website. 

But after putting in her credit card details she got an error message. She called the wine store and they suggested trying another credit card, which didn’t work either. 

“So the next day, I had a look at the website again,” says Linda. “I was like, hang on, let me just check that I’ve got everything right. Then I saw that the URL was a little bit strange. And I looked at their privacy policy, which looked shifty as well, which gave it away to me that it was, in fact, a dodgy website.” 

She checked her bank account and saw that someone was trying to use her credit cards, so she called and cancelled them. 

Then Linda alerted the wine shop owners, who were grateful. They had no idea there was a fake website out there displaying the same inventory as their real site, or that the scam site actually looked more polished than the genuine one.

“The strangest thing was that such a small business that was being targeted,” Linda says. 

Our investigation found several scam ads for popular clothing retailer Country Road.

It turns out Linda was luckier than some. 

Chris ordered “quite a few items'” from what looked like Country Road’s website before she was informed it was a fake.

“I contacted the bank and after a few weeks they did reimburse me, which I was very grateful for. I don’t really understand why Facebook would allow the scammers to put things like this on Facebook,” Chris tells us. 

Natalie was lured in by the same Facebook ad. “I spent $150 and it was a dodgy site. Don’t trust anything until you verify it,” she says. 

Des clicked on a link on Google that took him to what looked like the website for Weber barbecues.

“It had all the usual company logos, product info, freight charges etcetera. It  looked very genuine. I transferred $580 to a bank account on the Gold Coast. Long story short, it was a scam. No barbecue arrived.” 

Pauline tells CHOICE: “I bought a pair of sandals online after seeing them advertised and apparently well reviewed on Facebook. I am now $59.00 poorer and there is still no sign of the sandals. I have been scammed.”

Read more: Buying online from overseas retailers

Scammers several steps ahead 

CHOICE campaigns and policy adviser Yelena Nam reports that the scammers appear to be staying several steps ahead of any attempts to block them. 

“Scams are often sophisticated operations run like businesses, and they’re using the same tools that legitimate businesses use to advertise,” Nam says. 

“Ads on Google appear on the top of the page, and also throughout search results, grabbing the attention of a user. Similarly, ads on Facebook and Instagram often come when you’re scrolling through your feed or reading content.” 

Scams are often sophisticated operations run like businesses, and they’re using the same tools that legitimate businesses use to advertiseCHOICE campaigns and policy adviser Yelena Nam

Scam ads and the websites they lead you to often have similar characteristics, such as an unusual looking URL, spelling errors, prices that are too good to be true, and unfamiliar payment methods. 

But they can also be quite convincing. 

A recent social media post by the new National Anti-Scam Centre, for instance, warns consumers to beware of sponsored ads placed by scammers, highlighting fake versus real ads for Lorna Jane.

Read more: Seven ways to spot a scam website

5.2 billion ads removed from Google

A Google spokesperson tells us the company “has strict policies that govern the kind of ads that we allow on our platform, and ads that intend to mislead or deceive users are a violation of those policies. When we find ads that violate our policies, we will remove them”.

Google says it uses a combination of automated and human systems to detect fraudulent ads, and also encourages users of its platforms to report the ads. But the scale of the problem suggests these measures aren’t enough. 

The scale of the problem suggests these measures aren’t enough

The company says it removed over 5.2 billion ads from its platforms in 2022, but the scammers’ tactics keep evolving. 

One involves creating thousands of Google ad accounts simultaneously and using various techniques to show Google’s automated and human monitoring systems a different version of the ad than platform users see. These and other techniques make it that much harder to detect fraudulent ads, Google says. 

CHOICE is calling on the government to legally require digital platforms to do more to protect people from scams.

Cases against Facebook ongoing 

Trying to get the platforms to block the scammers takes its own set of resources. In early 2022, Australia’s richest man, mining magnate Andrew Forrest, launched a case against Facebook for publishing ads featuring his image that were linked to cryptocurrency scams. 

The ACCC also launched a case against Facebook and its owner Meta in 2022, alleging they engaged in false, deceptive and misleading conduct by publishing scam ads that featured well-known Australian public figures.

Trying to get the platforms to block the scammers takes its own set of resources

The cases are ongoing, but at least one precedent suggests there’s no easy path to victory. 

In 2022, a California federal judge ruled that Facebook was not responsible for deceptive ads on its platform that led to users paying for items they never received. 

After we showed Meta a number of scam ads on Facebook and Instagram for fashion retailers H&M and Gorman – as well as for a site, Bloomchices, that appears to be a scam posing as a business – a spokesperson told us the company is “constantly tackling scams” using both machine learning and human reviewers. 

“We encourage people to use our in-app reporting tools when they see any suspicious activity, and to turn on two-factor authentication for added security,” the spokesperson says.

Read more: Scams are surging – CHOICE calls on banks to do more

Government must make platforms accountable 

In the UK, an Online Safety Bill recently passed parliament that would impose penalties on platforms that fail to block fake ads and scams, but to date there has been no parallel effort by the Australian government. 

“CHOICE is calling on the government to legally require digital platforms to do more to protect people from scams,” Nam says. 

“Digital platforms have vast resources and technical capabilities to detect and prevent scams, but without mandatory rules backed by strong civil penalties, companies will continue to have little incentive to protect people.”