During 2020, there was a rise in the number of fake ads (in Australia and around the world) that were being used to scam members of public into signing up for fake Bitcoin investments. How did they convince people it was legitimate?  They used fake celebrity endorsements.

An exclusive investigation was carried out by Guardian Australia in December 2020, which uncovered that unauthorised Australian celebrity images were being used in scam bitcoin ads, and that these ads were part of a highly organised global enterprise that could be traced back to Moscow, Russia.

The investigation found that the fake Bitcoin ads have scammed tens of thousands of Australians and neither Google nor Australian regulators had been able to take any action against them, due to the enormous scale of the operation.

These fake celebrity ads are nothing new.  There have been similar scams running on news websites since 2018, however, with thousands of people isolating at home, due to COVID-19 lockdowns across the globe, the number of people falling for the scams has increased.

The Scam

Journalist, Josh Taylor, from Guardian Australia, signed up through one of the scam ads, to see exactly how people were being tricked into handing over their hard-earned cash. He first clicked on the link within a scam ad on a fake news website, an ad claiming that Dick Smith had a “get rich quick” scheme for all Australians.

 

 

He signed up on a site (‘bitcoin-Up’), which claimed to be a Bitcoin trading service, and was then directed to a supposed cryptocurrency trading platform called ‘Gtlot’. Within 5 minutes of signing up, Josh received a phone call from the Netherlands.  The man on the other end of the phone told him that, for an initial investment of US$250, Josh could make between $500 and $3,000 a month. He claimed governments would be phasing out paper money, because of Covid-19, so now was the perfect time to invest.  When Josh divulged that he was a reporter, the man denied any connection to scam ads, but still tried to obtain credit card details for an investment.

Unsuspecting Australians have been fleeced of their entire life-savings, because of falling for scams like this one.  Professor David Lacey, Managing Director of IDCare (a registered charity that offers support to people who’ve been scammed online), told Guardian Australia that celebrity endorsements scams are a “common deceptive technique”.

Lacey says the initial investment is just a ploy to bait people.

“In fact the real value for the scammers is not the initial US$250, but the harvesting of contact details from someone they know is primed and ready to explore the cryptocurrency investment world.”

Avoiding Detection

The Guardian Australia article states that Google says it removed 5,000 bad ads per minute in 2019 – 2.7bn in total.  The problem is, the scammers are always coming up with new schemes, and Google has to play catch-up with their policies to combat this.

Millions of Google market place ads are purchased by scammers, using the names of celebrities for a particular country, without the celebrity’s knowledge or endorsement. Some well-known names that have been used in Australia are: Dick Smith, Chris Hemsworth, Waleed Aly, Peter Evans, Karl Stefanovic & Eric Bana.

Fraudwatch International sees these fake ads constantly and the headline is always the same – “SPECIAL REPORT: <Celebrity Name>’s Latest Investment Has Experts in Awe and Big Banks Terrified”.

 

 

 

 

 

 

 

 

The scammers dodge detection from Google’s detection by repeatedly making minor changes to the text of their ads and websites that accept Google’s ads have not control over whether the scam ads appear on their website.

To enhance their scam, the criminals also buy hundreds of domains, which they use to host webpages which they redirect victims to once they’ve clicked on a fake ad.

The extra trick the criminals use to avoid detection, is changing the source code, so that when viewed in Australia the site is promoting the scam investment, but when seen from outside the target region, it shows a dummy website discussing plants, fruit or gardening.

Location of Scammers

Most scam websites are registered to third-party companies, to ensure the real identity of the scammer stays hidden, however, Guardian Australia found the names of five people (with hundreds of sites registered to them), and all of them had addresses in Moscow.

A call centre running similar celebrity-endorsed investment scams was also found to be operating from the Ukraine capital, Kiev.

What are the regulators doing about it?

Unfortunately, there is very little the regulators can do to stop these fake ads from showing up. Both Google and Facebook are struggling to prevent the ads appearing, and Australian regulators have said there is very little they can do.

A spokeswoman for the Australian Securities and Investments Commission (ASIC) told Guardian Australia it was difficult to trace scammers based overseas.

“In some cases, we’ve been able to trace these ads, the majority of which seem to be based overseas, despite creating the impression that they’re operating from Australia by using local addresses and phone numbers on their websites. Any data we have gathered we don’t make this public.”

Celebrities Hit Back

In the US, Cnet reported in July 2020, that Steve Wozniak was suing YouTube and Google for allowing Bitcoin Scams to continue spreading fake endorsements, using his likeness, via their platforms.

Wozniak filed the lawsuit with 17 other alleged victims, saying that YouTube and Google repeatedly ignored requests to take down the scam video and ads that allegedly used his name and likeness to convince viewers to send cryptocurrency during a fake bitcoin giveaway event.  .  The event, which ran for a number of months, promised to double the investment victims made, according to the lawsuit. But when viewers transferred their cryptocurrency, they received nothing in return.

The lawsuit, filed in a California court, alleged that YouTube knows about, promotes, profits off and has the power to stop the scams.  Wazniak claims, “If YouTube had acted quickly to stop this to a reasonable extent, we would not be here now.” “YouTube, like Google, seems to rely on algorithms and no special effort requiring custom software employed quickly in these cases of criminal activity. If a crime is being committed, you must be able to reach humans capable of stopping it.”

What is needed to combat the scammers, is a proactive approach to scam detection. FraudWatch International security analysts actively monitor the internet for the purpose of gathering intelligence, understanding patterns of behaviour and identifying current and future attack trends.  We use all of this information to support our primary objective of protecting client brands, whether it be celebrities or corporate entities, and we also share it with the broader community through articles like this.