State AGs urge Meta to clean up platform
A coalition of 42 state attorneys general, led by New York Attorney General Letitia James, is calling on Meta to take action against the rampant rise of investment scams on Facebook. These scams fraudulently use the images of prominent figures such as Warren Buffett, Elon Musk, and Cathie Wood to lure unsuspecting users into fraudulent schemes.
According to James, criminals are exploiting Meta’s automated and human review systems to post fake ads that result in significant financial losses for retail investors. Despite repeated reports to Meta, these scams continue to proliferate on the platform. The ads entice users to join chat groups on WhatsApp, a messaging platform owned by Meta, where they are unwittingly drawn into pump-and-dump schemes. In these schemes, criminals artificially inflate the prices of thinly traded stocks before quickly selling them for a profit, leaving investors with substantial losses.
Meta, the parent company of Facebook, Instagram, and WhatsApp, has been struggling to combat the surge of cyber scams on its platforms. The Wall Street Journal recently reported that Meta is a key player in the internet fraud economy, with global implications. One notable lawsuit involves an Australian billionaire who alleges that Meta’s AI-driven advertising program generated and amplified false ads using his likeness.
James emphasized the urgency of the situation, stating that thousands of Facebook users have collectively lost millions of dollars to these scams. She called on Meta to enhance its ad review process and prevent fraudulent ads from running on its platforms. The coalition of attorneys general is pressing Meta to implement stricter measures, including increased human review of ads, or else cease running investment ads altogether.
In response, Meta spokesperson Andy Stone underscored the need for collaborative efforts to combat scams on the platform. He highlighted Meta’s investments in technology to crack down on fraudulent activities, including the testing of facial recognition technology. Additionally, Meta is empowering users with on-platform warnings and tools, providing education on common schemes, and forming partnerships across various industries to protect individuals from falling victim to scams.
The joint effort by state attorneys general underscores the seriousness of the issue and the importance of holding tech companies accountable for safeguarding users from financial exploitation. As the battle against investment scams intensifies, Meta faces mounting pressure to strengthen its defenses and protect its user base from fraudulent activities.
