Celebrity endorsement scams are getting big in 2018, according to the ACCC. Reports of these types of scams have increased 400 per cent this year, and the amount of losses reported have gone up a huge 3800 per cent. As for why - the ACCC has called internet giants Facebook and Google to task for their role in displaying ads that link back to these scams.
Celebrity endorsement scams are a type of scam that use doctored images or quotes from well-known and trusted celebrities promoting products like skin care, weight loss products or investment schemes. Those who click are encouraged to sign up for a free trial, but are signed up for continuing payments that are applied quickly and often hard to cancel.
The reason these scams are particularly concerning is that they also seem to be particularly effective. Reported losses this year have totaled over $142,000. "Most people lost between $100 and $500 and in one case, a victim lost more than $50 000 through fake celebrity endorsement of an investment scheme," ACCC Deputy Chair Delia Rickard said. People who fall for these schemes are more likely to be older, and more often women than men.
The celebrity scams tend to appear on trusted websites through Google banner ads or on Facebook: hence the ACCC calling out their involvement in the growth of these scams. "Most of the reports to Scamwatch involve these scam advertisements running on Google ad banners or as ads in Facebooks news feeds," Ms Rickard said. "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."
It's a problem that underscores the issues with ad networks of the size managed by Google and Facebook. With the amount that goes through every day, it's almost impossible for them to notice and delete misleading ads as quickly as is necessary. Some commentators have suggested the implementation of a more technologically-minded solution, such as using facial recognition to detect when celebrity images are being wrongfully used.
A statement provided to Fairfax Media by Facebook says: "from January to March 2018, we took down 837 million pieces of spam, nearly 100 per cent of which we found and flagged before anyone reported it." Google's spokesperson said that ads that go against the company's policies were removed, adding "we have clear policies against ads that mislead or trick users into interacting with them."