Facebook could face fresh legal action to defend its record on scammers, with the consumer watchdog revealing its investigation into Facebook's parent company, Meta, was in the "very advanced" stages.
Speaking to the ABC before he steps down as chair of the Australian Competition and Consumer Commission (ACCC), Rod Sims revealed fresh details of the investigation, which was first announced last month.
The pace and progress of the ACCC's probe are expected to dial up the pressure on digital players after businessman Andrew "Twiggy" Forrest launched a criminal case against Facebook last month.
Mr Forrest alleges the social media giant breached anti-money laundering laws by failing to stop criminals using fake advertisements featuring celebrities, including himself, to scam Australians.
According to Mr Sims, a key issue in the ACCC's investigation – which is separate from Mr Forrest's action — is whether the social media giant has done enough to get rid of scammers from its platform.
"We have a very advanced investigation into whether a large digital platform should have taken down scams when they knew they were scams," Mr Sims said.
"I think if you know something's a scam and yet you've got this platform, I think there is an issue there in terms of whether you're misleading the users of your platform.
"Ultimately, that's the essence of consumer law, that you shouldn't mislead consumers."
Australians losing millions to scams
Scams have hit record highs during the pandemic, with criminals luring Australians with advertising on well-known social media and internet platforms.
Scamwatch figures show Australians lost $323.7 million to scams last year, almost double the losses recorded in 2020.
But under-reporting means the true cost of scams is likely far higher.
In the United Kingdom – where people also lost a record amount to scams in 2021 – the government will soon force Google, Facebook, Twitter and other online platforms to prevent fraudulent advertising, after public calls for stronger action against scammers.
The UK government said its draft law would require large platforms to improve protection against criminals impersonating celebrities or companies to hack bank accounts, steal personal data, or peddle unsafe financial investments.
Investment scams and dating scams are among the most common ways for people to be tricked into losing their money.
The ABC has spoken to dozens of scam victims over the past 18 months.
Many responded to online advertisements that mimicked a legitimate company.
One insider told the ABC it was common for victims to unwittingly hand over their details to scammers via an advertisement on social media.
Mr Sims said digital platforms needed to take greater responsibility for the content they made available.
"The platforms try and make out that they're just this billboard sitting in the town square and people can go and put a tack in the wall and put up something, and it has nothing to do with it," he said.
"That's not true.
"They have a lot of control and they can do more, I think, to spot scams and deal with them because they cost people a hell of a lot of money."
A spokesperson for Meta, Facebook's parent company, said the company did not want scams on their platforms and encouraged users to report them.
"We use technology to detect and remove scam accounts, content and ads and work to get ahead of scammers' attempts to evade our detection systems," the company said in a statement.
"While no enforcement is perfect, we continue to investigate new technologies and methods of stopping these scams, including taking legal action to stop the people behind them."
Mr Sims said the ACCC had had discussions with Facebook and Google about the issue but had not made much progress.
“I realise we’re going to have to spend money to do it, but I think much more can be done.
Mr Sims conceded it was “tricky” to discuss, because potential breaches of consumer law were involved, but was confident in the ACCC’s position.
Banks 'can do more' to stop scammers
The Consumer Action Law Centre (CALC) said banks should take more responsibility for the accounts being set up by scammers, and be more proactive in contacting customers if they detect suspicious transfers.
"Banks need to be more liable for scam losses generally, and that will provide them with an incentive to invest in systems and technology to detect and prevent scams," CALC chief executive officer Gerard Brody told the ABC in December.
"If the banks were required to reimburse their customers for any scam losses, they would feel the pain and would have that incentive to invest in ways to detect and prevent scam losses."
Mr Sims said talks with banks and telecommunications providers had been productive.
"I still think they can do more," he said.
"I mean, if we're going to have an internet as we've got it and it's going to be as used as we all want it to be, because it's a great way to do business, we have to find a way to put more resources into scams."
The Australian Banking Association launched a scam prevention campaign in September last year.
