Fake investment ads persist on Meta’s social networks

Despite measures being put in place to block them, misleading and fraudulent investment adverts continue to be shown to UK consumers using Meta’s Facebook and Instagram platforms, according to consumer advocacy organisation Which?, which is calling for the government to pass the Online Safety Bill as a matter of urgency.

Which? worked with Demos Consulting to conduct both human and automated analysis of the adverts available on Meta’s ad library – a publicly available tool that shows what adverts are visible to Facebook and Instagram users in a given country.

They found multiple examples of red flags, such as adverts not carrying risk warnings or promising sensational, life-changing returns. Many of these ads played on fears of missing out on potential opportunities.

A quarter of such adverts related to property investment, while just over 22% related to crypto assets, such as virtual currencies or non-fungible tokens (NFTs). In about 10% of cases, the nature of the product or service advertised was unclear.

Which? said it had also found a number of adverts for binary options, a so-called “exotic option” in which the ultimate pay-off is either a fixed sum or nothing. Binary options are usually scams – the UK banned them in 2019, and Meta instituted a ban on advertising them in 2018.

The organisation said the presence of these adverts meant consumers were being misled into making poor or risky investment choices, and in some cases becoming fraud victims, with an average loss put at £45,000 per person from “clone” firm investment scams.

“It is extremely worrying that misleading and potentially fraudulent investment adverts are still being shown to Facebook and Instagram users, putting consumers at risk of immense financial and emotional harm,” said Rocio Concha, director of policy and advocacy at Which?.

“If a consumer group and another charity can design algorithms and uncover these adverts, then tech giants should be able to create effective systems to do the same job on a bigger scale.

“The government must take a crucial step in the fight against fraud by ensuring the Online Safety Bill is passed into law without further delays. Otherwise, we could be waiting even longer for alternative action to tackle online fraud infiltrating the world’s biggest search engines and social media sites.”

Concha added: “The government’s Online Advertising Programme should also build on the Online Safety Bill to move from the current reactive takedown approach to one that prevents scammers entering the system in the first place. It should force online platforms and other players in the advertising ecosystem to protect consumers from fraudulent and misleading adverts.”

In one case, the analysis highlighted a repeat offender who was remarkably persistent in posting dodgy adverts on Meta’s platforms between November 2021 and March 2022. These adverts focused on a piece of software called Tesler, and 20 of them raised eight separate serious risk red flags – notably the use of a similar brand name to carmaker Tesla, possibly an attempt to draw people in by suggesting a link that is not there.

It found Tesler’s adverts posted by 28 different pages, many of them entirely unrelated to investments, and said the variety of pages used, and the frequency of posting, suggested a coordinated campaign to spread risky adverts to a wider audience by tapping into topics of interest, such as food or news.

One advert found linked to a Google-generated website that was exploiting the branding of financial magazine Forbes and implied an endorsement that Forbes has never given.

A Which? researcher who clicked on one of the Tesler ads was prompted to enter their contact details, and within an hour was telephoned by a representative who pressurised them into setting up a trading account, claiming during the conversation that Tesler’s “sophisticated algorithm” had an “87% success rate”.

Which? said the Financial Conduct Authority (FCA) had previously warned about a scam investment company using the Tesler brand name and impersonating a known and regulated trading company, although the Which? investigation was unable to prove a link between the two.

Which? collected 39 unique ads that mentioned Tesler, and despite reporting its findings, adverts for Tesler could still be found on Meta platforms on Friday 2 December 2022. It said Tesler is almost certainly a scam. It attempted to contact the organisation itself, but found no means to do so.

A Meta spokesperson said: “We removed a number of the ads brought to our attention for breaking our rules, many of which had already been disabled prior to being contacted by Which?. Promoting financial scams is against our policies and we are dedicating significant resources to tackling this industry-wide issue on and off our platforms. We recently started rolling out a new process that requires financial services advertisers targeting users in the UK to be authorised by the FCA.”

Meta also said it does not allow fraudulent activity on any of its platforms, and works closely with law enforcement to support investigations and keep scammers off its platforms.

It pointed out that enforcement actions can never have a 100% success rates because both automated and human reviewers can make mistakes. As such, it cannot detect all possible policy violations, meaning that if an ad is running on a Meta property, it is not necessarily compliant. More details of its ad review process can be found here.

Which? noted that Meta is not alone in facing problems with dodgy adverts, but it is substantially more transparent about the advertising it does publish, which made the investigation somewhat easier. It called on Meta, and others, to increase and improve this transparency still further, and said online platforms could deploy their technology better to create algorithms to detect and remove harmful advertising at scale.

Which?’s full report can be found here.