Martin Lewis settles lawsuit against Facebook over scam ads | Business News
Martin Lewis, the founder of MoneySavingExpert.com, has dropped his lawsuit against Facebook for running scam advertisements featuring his name and image.
The entrepreneur had lodged papers against the social media giant in the High Court last year, telling Sky News the legal action was the result of months of frustration with scammers piggybacking on his reputation and preying on Facebook users with get-rich-quick scams.
Mr Lewis, who was given an OBE in 2014, said he was aware of a woman who had lost £100,000 as a result of a bogus advert featuring his face.
At the time, he said: “Enough is enough. It’s about time Facebook took responsibility.
“This is about stopping Facebook facilitating the ripping off of vulnerable people and destroying my reputation at the same time.”
On Wednesday, Mr Lewis and Facebook jointly announced a settlement to the defamation action as Facebook donated £3m to set up a Citizens Advice scams action project from and launch a new reporting tool for scam adverts.
The donation will be made up of £2.5m in cash over the next two years, and £500,000 in Facebook advertising credit coupons which will be issued over the next three years.
Mr Lewis told Sky News he received a six-figure sum from Facebook for his costs.
Online investment scams targeting people through social media have stolen increasing amounts of money from victims in recent years – rising in the UK by 400,000% in the last six years alone.
Figures from Action Fraud show the amount lost to “binary options” trading increased from £6,200 in 2012, to £27m in 2017 alone, with the total currently standing at £61m.
Binary options, or fixed-odds betting, are being used by fraudsters as part of a multibillion-pound industry which is believed to be coordinated by overseas criminals.
Analysis by Rowland Manthorpe, technology correspondent
This is an impressive victory for Martin Lewis – but, crucially, it’s not a victory in court.
Facebook has not admitted legal liability. Like everything else on its platform, Facebook insists scam ads are the responsibility of the person who put them there.
But while there is no legal precedent, this case may set an uncomfortable practical precedent for Facebook.
By agreeing to take, as it puts it, “a leadership role”, the social network has accepted some measure of responsibility for the content its users see.
To see how that could make life difficult for Facebook, it’s worth considering a fact that went unmentioned in the cosy press conference held to announce the news.
As well as donating £3m to Citizens Advice, Facebook settled with Martin Lewis for what he says is “a six-figure sum” covering his costs, making it, in his eyes, “a definite win”.
Other potential complainants – including, for instance, the victims of these scams, some of whom lost tens of thousands of pounds – will be taking notes.
In the short term, however, Facebook has probably managed to do what it found impossible in 2018 and got out ahead of a problem.
Now the questions will move onto the other half of the online advertising duopoly: Google.
Mr Lewis say the search firm’s ad network is serving scam ads, and complains that “they’re not even giving us a direct contact”.
After today, that probably won’t be the case much longer.