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Lawsuit Filed Against Meta for False Celebrity Endorsements in Investment Advertisements

ByHuey Yee Ong

May 1, 2024
Lawsuit Filed Against Meta for False Celebrity Endorsements in Investment Advertisements

Lawsuit Filed Against Meta for False Celebrity Endorsements in Investment Advertisements

Four individuals have initiated legal proceedings against Meta Platforms Inc.’s Japanese subsidiary for allegedly allowing fraudulent investment advertisements featuring counterfeit celebrity endorsements on its platforms, Facebook and Instagram.

The lawsuit, filed in Kobe District Court, seeks 23 million yen (approximately $147,000) in damages, claiming the plaintiffs suffered financial losses due to Meta’s purported negligence in authenticating these ads.

The plaintiffs, hailing from Kobe and Tokyo, assert that they were misled by advertisements promoting foreign exchange margin trading, which falsely appeared to be endorsed by high-profile Japanese personalities, including Yusaku Maezawa and Hiroyuki Nishimura. This deception prompted them to transfer money to specific bank accounts, leading to financial losses. These events occurred between August and October of the previous year.

The broader context involves a rise in social media-related investment scams in Japan, with reported losses reaching approximately 27.8 billion yen in 2023, as per the National Police Agency. Such incidents have prompted discussions within the government and the ruling Liberal Democratic Party about introducing stringent legal measures to curb these fraudulent activities by June.

Yasumichi Kokufu, the leading attorney for the plaintiffs, criticized Meta for its inadequate verification processes during a press conference in Kobe. He highlighted the company’s failure to sufficiently scrutinize the scam ads that led to significant customer harm.

In response to the lawsuit, a representative from Meta stated that the company would not comment on ongoing legal matters. This lawsuit is reportedly the first to seek compensation from a social media operator for damages incurred from fraudulent advertisements.

The legal team representing the plaintiffs is also considering additional lawsuits as more individuals have come forward seeking advice on similar issues, indicating a potential increase in legal actions against social media platforms for similar complaints.

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Featured Image courtesy of ARND WIEGMANN/REUTERS

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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