New York Attorney General Letitia James speaks during a press conference at her office on July 13, 2022, in New York City.
Michael M. Santiago | Getty Images
A coalition of 42 state attorneys general is urging Meta to take action against the increase in investment frauds on Facebook, which exploit the images of well-known figures like Warren Buffett, New York AG Letitia James announced Wednesday.
James explained in a press release that scammers are bypassing both Meta’s automated systems and human reviews to run false advertisements, leading retail investors to suffer significant losses. Her office continues to observe these scams even after notifying Meta about them.
The fraudulent ads claim to provide access to Buffett, Elon Musk, or Cathie Wood from Ark Invest, and entice Facebook users to join chat groups on WhatsApp, a platform owned by Meta.
Participants may unwittingly engage in illicit schemes where fraudsters inflate the prices of low-volume stocks and quickly sell them, resulting in losses for unsuspecting investors.
According to a report last month by the Wall Street Journal, Meta is struggling to address the surge of cyber fraud on its platforms, which has become a key part of the online scam economy. This issue extends globally, highlighted by a lawsuit from an Australian billionaire who claims that Meta’s AI-driven advertising system created and promoted misleading ads featuring his likeness.
“Many Facebook users have suffered hundreds of millions in losses due to these scams, and Meta must enhance its efforts to prevent these deceptive ads from appearing,” James stated. “I am leading a bipartisan effort urging Meta to improve its ad review process to eliminate these scams. I also encourage all New Yorkers to exercise caution before investing in social media advertisements.”
Source: New York State Attorney General’s office
The attorneys general are pressing Meta to enhance its ad monitoring efforts, suggesting that if it cannot mitigate the scams, it should halt investment advertisements altogether.
Among those joining James are AGs from states like California, Connecticut, Georgia, Massachusetts, Michigan, New Jersey, and Pennsylvania.
Andy Stone, a spokesperson for Meta, acknowledged that tackling scams on its platforms necessitates teamwork among banks, governments, law enforcement, and telecom companies.
“We are dedicated to playing our role by investing in technology for stringent enforcement against scams, exploring the use of facial recognition technology, providing users with protective tools and warnings on our platform, educating consumers on common fraud schemes, and forming partnerships across sectors to safeguard individuals from these scammers,” Stone explained.
