Meta, the parent company of Facebook and Instagram, has announced new measures to tackle the growing issue of scam advertising related to financial products on its platforms. This move comes in response to alarming statistics, with 76% of all social media-originated scam losses in Australia being attributed to Meta’s platforms. To address this, Australian advertisers will now need to verify their beneficiary and payer information, including their Australian Financial Services Licence (AFSL) number, before their ads can be published by Meta. This process will generate a “Paid for By” disclaimer visible to users, displaying verified information about the advertiser.
The initiative focuses on protecting Australian consumers from financial scams, which have devastating effects on many individuals. Financial services ads include a wide range of products, such as insurance, mortgages, loans, investment opportunities, credit cards, and various applications. Will Easton, Meta ANZ’s managing director, emphasized the critical need to safeguard users from these scams. Between January and September 2024, Scamwatch reported 5,738 investment scams in Australia, resulting in losses exceeding $135 million. Meta’s new ad verification requirements are a step towards mitigating these scams, which often involve impersonation of legitimate financial institutions.
Meta’s initiative has garnered positive feedback from several stakeholders. Westpac’s group executive, Carolyn McCann, recognized the verification process as a significant advancement. Earlier in the year, she had critiqued Meta for its sluggish response to scam reports from Westpac customers and urged faster action against fraudulent ads. This move by Meta aims to address such concerns and enhance consumer protection.
The new requirements align with the voluntary Australian Online Scams Code, launched by the Digital Industry Group Inc. (DIGI) in July 2024. The ad verification process will gradually roll out over the next month and become mandatory by February 2025. Meta’s efforts to curb financial scams come amidst criticisms about its previous handling of scam advertisements. Both public sentiment and officials have expressed that social media platforms need to do more to protect their users.
In summary, Meta’s new ad verification requirements for financial products aim to bolster consumer protection against scams in Australia. This initiative reflects a broader trend towards increasing accountability and transparency among social media platforms. By requiring advertisers to verify their credentials and making this information publicly accessible, Meta hopes to reduce the incidence of scam ads and restore trust in digital advertising.
