The Australian Competition and Consumer Commission has launched Federal Court action against Meta Platforms and Meta Platforms Ireland over the ads.
It has also alleged that Meta aided and abetted or was knowingly concerned in false and misleading conduct.
“The schemes were, in fact, scams and people featured in the ads had never approved or endorsed them,” the ACCC said.
The ads contained links which took Facebook readers to another site which had fake news reports that were endorsing cryptocurrency and invited users to sign up.
The ACCC said that was followed by high pressure sales tactics. One consumer allegedly lost $650,000.
ACCC chair Rod Sims said the essence of the organisation’s case against Meta was that it was responsible for the ads published on its platform.
“It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in the ad’s landing page, using Facebook algorithms. Those visits to landing pages from ads generate revenue for Facebook,” Sims said.
It also alleged that the fake endorsement from celebrities remained on the ads even after complaints to Facebook from the people depicted.
“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,” Sims said.
“Apart from resulting in untold losses to consumers, these ads damage the reputation of the public figures being falsely advertised as an investment opportunity on Facebook.”