Facebook owner Meta is being sued for showing scam ads that showed people including David Koch and Dick Smith backing cryptocurrency schemes they never endorsed, and cost victims dearly.
The Australian Competition and Consumer Commission (ACCC) will ask the Federal Court to impose hefty fines and orders against Meta, alleging staff knew the endorsements were fake and the ads were scams.
Users who clicked the ads were shown what the ACCC alleges were fake media articles that included prominent Australians making comments endorsing money-making schemes.
Mining magnate Andrew Forrest and former NSW premier Mike Baird were others whose identities were used without permission.
Users were encouraged to register for the schemes. Scammers then repeatedly called those who registered and asked them to transfer money.
One person lost more than $650,000 through one of the scams, promoted as an investment opportunity.
ACCC chair Rod Sims said Meta was responsible for ads it published.
"Meta should have been doing more to detect and then remove false or misleading ads on Facebook, to prevent consumers from falling victim to ruthless scammers," he said.
A Meta spokesman said it co-operated with the ACCC investigation and would defend the action.
"We don't want to see ads seeking to scam people out of money or mislead people on Facebook," he said.
"They violate our policies and are not good for the community."
The spokesman said Meta used technology to detect and block scam ads. The company could not comment on the detail of the ACCC action, he said.
Mr Sims argued Facebook's targeting technology exacerbated the problem by showing the scam ads to those most likely to click them.
He said no other agency in the world had taken legal action of this kind against Meta.
Mr Forrest published an open letter to Meta owner Mark Zuckerberg in 2019 calling for Facebook to stop accepting ads falsely using his name and face.
The mining magnate this year filed criminal charges against Meta.
People who think they may have fallen victim to a scam should contact their bank or financial provider.
