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Fake Facebook Ads Lawsuit Overview:
- Who: A small online clothing retailer is suing Facebook.
- Why: The retailer claims Facebook failed to stop fraudsters from posting ads posing as her company, and taking potential customers to scam websites for the store.
- Where: The lawsuit is pending in British court.
A small business owner who owns an online fashion store is suing the social media giant for allegedly allowing fraudsters to post Facebook ads purporting to be her business, taking her potential customers to a fake website to be scammed.
Plaintiff Maura Davenport, the owner of RitaNoTiara Ltd, lodged a lawsuit against Facebook Oct. 7 in the High Court, alleging the social media company infringed on her intellectual property rights, Law360 reports.
Her lawyers say the action could pave the way for thousands of other small businesses affected by the same Facebook ad scam to recoup losses, too.
The lawsuit would “establish the extent to which Facebook has a legal liability” for infringement of copyright committed by a third party on the social media platform, the law firm said in a statement.
In Davenport’s case, she says scammers have been using her brand logo and images of her products to create fake Facebook ads that then take her customers to a fake website for RitaNoTiara since 2019.
Once the customer pays, the scammer delivers a low-quality product or no product at all, the lawsuit claims. Davenport says she has repeatedly reported the fake ads to Facebook, but only a few were removed.
Social Media Giant Profits from Facebook Ad Scams
According to her lawsuit, Facebook is receiving revenue for each fake ad that is scamming consumers and taking business away from Davenport.
“Rather than profit[ing] from it, Facebook needs to do more to protect small businesses from copyright abuse and fraud on its platforms,” Seddons said in a statement.
As Facebook profits, RitaNoTiara has shown a significant loss in turnover from 2018, the lawsuit says. Davenport is seeking damages of a value yet to be determined.
The lawsuit comes after tech giants Google and Facebook were accused of making money off the pension scam industry by showing ads on their platforms placed by fraudsters, a parliamentary committee said in March.
The Work and Pensions Committee has called for protections against the practice to be built into an upcoming Online Harms Bill, reports The Guardian.
The legislation proposes to force internet companies like Facebook and Google to remove content associated with child abuse, terrorism or suicide, or face large fines. The committee said scams and other forms of financial fraud should also be included in the bill.
Do you think Facebook should be held responsible for fake ads on its platforms? Let us know in the comments!
Davenport is represented by Chris Pearson of Lamb Chambers, instructed by Seddons Solicitors.
The Fake Facebook Ads Lawsuit is RitaNoTiara Ltd. v. Facebook Ireland Ltd., Case No. IP-2021-000061, in the Business and Property Court of the High Court of Justice of England and Wales.
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