Meta to combat social media finance scams, introduces new ad verification
In a move to protect Australian consumers from scam advertising on social media, Meta, the owner of Facebook and Instagram, will this month roll out new requirements for advertisers promoting financial products on its platforms.
Before Meta publishes financial services ads on its sites, advertisers will be required to verify their beneficiary and payer information including their Australian Financial Services Licence number (unless otherwise exempt).
During the ad creation process, verified advertisers must select the verified payer and beneficiary information to include on their ad.
This, in turn, will generate a 'Paid for By' disclaimer that will then be visible to users.
The disclaimer will display verified information about the beneficiary and payer, as well as the business's licence number or exemption.
In addition, verified financial services ads will be available for users to view on the Meta Ad Library, a place where consumers can search for ads running across Meta platforms.
However, Meta says this may vary depending on the type of advertisement and the market it is targeting.
The move may come as welcome news for the 21 million-plus Australians who have an active Facebook account. Meta accounted for 76% of all reported losses to scams that originated on social media last year.
Financial services ads promote financial products and services. This includes ads about insurance products, mortgages, loans (long and short-term), investment products and opportunities, credit cards, and credit applications.
Will Easton, managing director, Meta ANZ, says the company recognises the devastating impact that finance and investment scams can have on Australian consumers.
"The introduction of financial advertiser verification is an important additional step towards protecting people in Australia from these sophisticated scammers, who try to impersonate legitimate financial institutions and advertisers," he says.
Why is scam protection important?
Between January and September 2024, Scamwatch recorded 5738 investment scams, totalling more than $135 million in losses. Approximately one quarter of these were served through social media.
These scams range from sophisticated deepfakes featuring public figures such as David Koch, Andrew Forrest, and Anthony Albanese, to simpler investment traps.
A recent investigation by The Age alleged that Meta profits from criminals who use Facebook ads to promote these scams.
However, Meta strongly denied these claims, asserting that their ads are subject to review and adhere to their policies.
Assistant Treasurer Stephen Jones, who had previously accused the company of failing to address scams, was, at the time, not satisfied.
"Something is very wrong when Facebook Ads blatantly promote criminal activity but somehow, they don't breach Meta's community standards," Jones published on social media platform X on November 24.
Public sentiment echoed this concern. A recent CHOICE survey found that over 60% of Australians believe social media and digital platforms weren't doing enough to protect users from scams.
The timeline for Meta implementing new restrictions on financial ads
These changes will start to roll out to advertisers over the next month. By February 2025, advertisers will be required to complete the verification process before publishing qualifying ads to audiences in Australia. However, Meta says that dates may vary.
Meta says the new requirements are part of its support for the voluntary Australian Online Scams Code introduced in July 2024 by the Digital Industry Group Inc (DIGI).
The reaction to Meta's verification process
The ad verification process has been welcomed by Westpac, with Carolyn McCann, group executive, customer and corporate services, saying it's "a great start".
Earlier this year McCann wrote to Meta about 360 different scams on Facebook that Westpac customers had complained about. She had also publicly criticised the company for "moving too slowly" during a house economics committee meeting in August.
"I've been saying for months that social media companies need to do more, so this is a step in the right direction from Meta. Only when every sector does their bit - banks, telcos, social media - will we really defeat the scammers."
Telcos to protect Aussies from SMS scams
In other scam-related news, telcos will be required to block scams sent through text and warn recipients that they come from unregistered senders, under new rules introduced by the government on November 3.
Communications minister Michelle Rowland has directed the Australian Communications and Media Authority (ACMA) to create an enforceable standard requiring telcos to verify if messages sent under a brand name match a legitimate registered sender.
The list of legitimate senders, called the SMS Sender ID Register, will help stop scammers from using the names of trusted brands - like ANZ, Linkt or myGov - and deceiving Australians into thinking the scam messages are from reputable sources.
If the sender's details are unregistered, the SMS will be blocked or flagged with a warning.
Get stories like this in our newsletters.
