Meta Platforms Inc., the parent company of Facebook and Instagram, recently announced significant changes to its advertising policies targeting financial products and services, aiming to create safer online experiences for Australian consumers. The adjustment responds to heightened scrutiny and concerns over the increasing number of scams proliferated through its social media platforms, which have become hotbeds for fraudulent advertisements.
Beginning December 2024, advertisers will be required to meet stricter verification guidelines before they can promote any financial services. This includes financial products such as insurance, mortgages, loans, investment opportunities, and credit cards. Advertisers will need to obtain and provide their Australian Financial Services License (AFSL) number or declare any exemptions, significantly enhancing transparency and consumer protection.
According to Will Easton, Meta's managing director for Australia and New Zealand, "The introduction of financial advertiser verification is an important additional step toward protecting people in Australia from these sophisticated scammers who try to impersonate legitimate financial institutions." This statement highlights the company's commitment to ensuring the reliability and integrity of advertisements on its platforms.
This move follows the removal of 8,000 dubious advertisements earlier this year, which had exploited the images of well-known public figures to mislead consumers. Celebrities, including successful entrepreneur Andrew Forrest and former television host David Koch, have been frequently targeted in these deepfake ads, which create the illusion of their endorsement for fake investment schemes. Such tactics have raised alarms about the responsibility tech platforms hold in safeguarding users from fraud.
Deepfake technology, which uses artificial intelligence to create hyper-realistic impersonations, enables scammers to craft ads with lifelike depictions of public figures, falsely claiming these personalities are backing various financial opportunities. Typically, users are lured to partake with promises of incredible returns only to be asked for personal details and deposits, often resulting in significant financial losses.
Compounding the issue, Scamwatch, the Australian government's reporting service, recorded more than 5,700 investment scams between January and September 2024, accounting for over $135 million lost. It was noted approximately 25% of these scams were facilitated through social media, pointing to the urgent need for stringent ad verification and improved digital safeguards.
Australian government officials, including Assistant Treasurer Stephen Jones, have been vocal about the expectation for Meta and similar platforms to prioritize consumer safety and proactively curb these malicious activities. Jones criticized the perceived sluggish response by internet platforms to address the influx of scams, stating, "It is offensive they make money from scam ads on their platforms." With public sentiment echoing these concerns, over 60% of Australians are reportedly skeptical about the tech industry's efforts to safeguard users against such scams.
Meta's tightening of ad rules also forms part of broader regulatory efforts such as the voluntary Australian Online Scams Code introduced by the Digital Industry Group Inc. (DIGI) earlier this year. This collaborative initiative aims to create stronger standards for digital advertising, emphasizing accountability for online marketplaces.
After formally adopting these verification protocols, financial service ads will carry a "Paid for By" disclaimer displaying verified information about the payer and beneficiary, significantly enhancing the credibility of advertisements. There will also be provisions to allow consumers to access these advertisements through the Meta Ad Library, offering greater transparency and making it easier for users to report suspicious content.
Westpac, one of Australia’s major banks, viewed Meta's new verification process as a positive step forward. Carolyn McCann, the bank's group executive for customer and corporate services, stated, "This announcement is a great start from Meta, and I'll continue to encourage them to do more to make their sites scam-free." This sentiment underlines the collective responsibility of the banking sector, technology companies, and regulatory bodies to eliminate fraudulent activities online.
Overall, the introduction of stringent ad verification rules signals Meta's proactive stance against online scams targeting Australian consumers. This adjustment is not merely about compliance; it reflects the need to rebuild trust with users who have become increasingly wary of the platforms they frequent. The financial ad verification process is expected to take effect fully by February 2025, pushing advertisers to adhere to these new requirements before any ads can be published.
With scams morphing and adapting to the digital age, it is indispensable for platforms like Meta to continuously evolve their strategies to combat such threats. The introduction of required licenses and greater accountability could mark the beginning of more significant changes to how financial advertising is approached across global digital landscapes.
