A coalition of 42 state attorneys general is urging Meta to take decisive action against the proliferation of investment scams on Facebook that are exploiting the images of prominent figures such as Warren Buffett. This appeal was made public by New York Attorney General Letitia James on Wednesday.
In a news release, James expressed concern that scammers are consistently managing to bypass both Meta’s automated systems and human review processes to propagate misleading advertisements, causing substantial financial losses for retail investors. Her office continues to observe these fraudulent activities even months after they have been reported to Meta.
The misleading ads, which offer purported access to Buffett, Elon Musk, and Cathie Wood of Ark Invest, prompt Facebook users to join chat groups on WhatsApp, a messaging platform owned by Meta, according to the New York AG.
Once engaged, users become unwitting participants in alleged pump-and-dump schemes, where fraudsters artificially inflate the prices of less-traded stocks and subsequently sell them for profit, leaving small investors with significant losses.
Meta, which oversees Facebook, Instagram, and WhatsApp, is grappling with the escalating issue of cyber scams across its platforms, recently identified as a pivotal element of the global internet fraud landscape by the Wall Street Journal. The situation extends beyond the United States; a notable case involves an Australian billionaire suing the company for allegedly using his image in false advertising through its AI-driven marketing algorithms.
“Numerous Facebook users have incurred substantial losses, totaling hundreds of millions of dollars, due to these scams, and it is incumbent upon Meta to enhance its measures against such fraudulent advertisements,” stated James. “I am spearheading a bipartisan effort urging Meta to intensify its review processes for advertisements to eliminate these scams. I also advise all New Yorkers to exercise caution before investing in promotions encountered on social media.”
The attorneys general emphasized the necessity for Meta to strengthen its ad oversight, suggesting increased human review. They warned that without effective measures to combat these scams, Meta should refrain from running investment-related advertisements altogether.
In addition to James, attorneys general from states including California, Connecticut, Georgia, Massachusetts, Michigan, New Jersey, and Pennsylvania joined the call for action.
