Australian consumer watchdog slams tech giants over fake celebrity ads

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Fake celebrity ads aren’t new but they’ve become widespread in 2018. According to reports from the Australian Competition and Consumer Commission's Scamwatch, celebrity endorsement scams have increased by 400%, resulting in financial losses for consumers that have gone up by an eye-watering 3,800%.

During this year alone Scamwatch received 200 complaints, with the total amount of money lost adding up to $142,000, with older women falling victim most often.

The ACCC’s deputy chairperson Delia Rickard said that a consumer typically loses between $100 to $500 to these scams, but one individual “lost more than $50,000 through fake celebrity endorsement of an investment scheme”.

“The growth in these scams is very concerning, particularly as over half the reports we received included a financial loss,” Rickard added.

Check the floodgates

Facebook and Google are already under investigation by the ACCC for data harvesting and their influence on advertising and traditional media companies in Australia, but the consumer watchdog has called on the tech giants “to do more” to check the spread of fake celebrity ads on their internet platforms.

According to Rickard, “Most of the reports to Scamwatch involve these scam advertisements running on Google ad banners or as ads in Facebook's news feeds.” She wants the “tech giants to do more to quickly suspend ads, as every time consumers click on a scam ad, they are at risk of losing money”.

No such thing as a free trial

Celebrity scammer ads use doctored images and fake quotes from popular and trusted celebrities promoting a wide range of items, from weight loss pills to skin care products – even investment schemes. 

The ACCC says that these free trials come with strict terms and conditions, which only arrive with the product and aren’t visible anywhere online, and include terms like having to return the product within a near-impossible timeframe.

Anyone clicking on those ads is prompted to sign up for a free trial, but are required to provide payment details before the trial can begin. Once signed up, however, victims find they’re being charged immediately with little or no options to cancel payments.

The Australian Competition and Consumer Commission (ACCC) has urged the public to be wary of products and services that come with endorsements from popular celebrities and require payment details to be submitted up front.