• Facebook announced that it filed a lawsuit against the founder of a company called LeadCloak on Thursday, alleging that it was helping coronavirus scammers run deceptive ads on Facebook and Instagram by selling “cloaking” software to them.
  • Cloaking fools ad-review systems by showing a website displaying a product that would not raise flags while users would see an entirely different website that could violate Facebook’s guidelines, the company said.
  • Facebook alleges that LeadCloak software had been used by scammers related to coronavirus, cryptocurrency, pharmaceuticals, diet pills, and fake news pages. It did not provide a dollar amount related to the number of ads that had run on the platform. 
  • This is the latest example of Facebook’s crackdown on ad-spoofers. Back in December, it sued the Hong Kong company ILikeAd for hijacking user accounts to run deceptive ads. 
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Facebook announced that it filed a lawsuit against Basant Gajjar, the founder of a little-known company named LeadCloak, alleging the small firm was helping scammers run deceptive ads on Facebook and Instagram by selling cloaking software to fool its ad-review systems. 

“Using the name “LeadCloak,” Gajjar violated Facebook Terms and Policies by providing cloaking software and services designed to circumvent automated ad review systems,” Facebook’s statement said. “LeadCloak’s software also targeted a number of other technology companies including Google, Oath, WordPress, Shopify, and others.”

Cloaking software fools ad-review systems by showing them entirely innocent websites linked to each ad, so no red flags are raised.

But users see an entirely different website that may promote scams or violate the company’s terms of service.

In this case, Facebook says that LeadCloak’s software was used to allow scams related to COVID-19, cryptocurrency, pharmaceuticals, diet pills and even fake news pages to flood user newsfeeds. Facebook did not provide a dollar amount related to the number of ads that had run using LeadCloak’s software.

The company has been ramping up its efforts to combat coronavirus-related scams and misinformation on its platform. Last month, Facebook and a coalition of other tech companies said they would be working with government health agencies to combat misinformation about the coronavirus. 

 Cracking down on misinformation 

Even before the COVID-19 outbreak, Facebook and its social-network peers were under fire from lawmakers and other critics who argued the companies weren’t doing enough to stamp out harmful and misleading content on their platforms. Disagreement was fiercest over Facebook’s policies regarding political ads. 

But the company has been cracking down on companies that sought to promote ads with malware on its platform. Facebook sued the Hong Kong company ILikeAd in December, alleging that it tricked users into downloading compromising malware, letting it hijack user accounts to run and pay ofr fake ads on diet pills and male enhancement supplements. 

In the case of LeadCloak, the company says it will not only be suing Gajjar but ensuring that it takes measures against LeadCloak, like disabling the accounts using its software.  

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