Judge approves class action suit against Facebook after Quebec celebs featured in fake crypto ads

Marie-Claude Barrette - le Marie-Club.

A Quebec judge has authorized a class action lawsuit against Facebook that alleges the social media site is liable for damages to the reputations of public figures whose names were used in misleading ads for cryptocurrency scams.

The lead plaintiff in the case is Marie-Claude Barrette, a Quebec-based television personality and author.

She is one of several Quebec public figures who have recently experienced identity theft, including Véronique Cloutier, Normand Brathwaite, Maripier Morin, Claude Legault and Ève-Marie Lortie.

In a decision rendered last week, Superior Court Justice Martin F. Sheehan authorized the class action, which is seeking damages for defamation as well as monetary and punitive damages that have yet to be determined.

According to the court document, Facebook users who click on the fake ads are taken to a website featuring a fake news article mimicking the La Presse newspaper, claiming that the public figure has made money through cryptocurrency investments.

The fake article contains a link that takes the user to another website resembling a cryptocurrency exchange platform, and the user is encouraged to provide personal information by filling out a form.

Then, the fraudsters contact the user to establish a relationship of trust to encourage them to invest money in their cryptocurrency platform.

Justice Sheehan disagreed with Facebook’s parent company, Meta, that the Quebec Superior Court does not have jurisdiction to hear the case and ruled that Barrette’s claims are not frivolous and have merit.

“Indeed, when scammers misuse a celebrity’s name or image to get clicks, the consequences go far beyond mere inconvenience. They can result in significant financial and reputational repercussions,” the judge noted.

“When the public believes that a celebrity is promoting a scam, a low-quality product, or an illegal product, trust in that person erodes. Such abuses can harm that person’s credibility and brand image.”

At least one Facebook user reported the fake ads featuring Barrette, but the social media company “took no action to remove them,” the lawsuit alleges.

However, Facebook and Meta argue that as managers of digital platforms, their liability is limited.

The allegations in the class action lawsuit have not been tested in court.

Now that the lawsuit has been authorized, the case can proceed to determine whether Facebook and Meta are liable for damages caused by the fake ads on their platform and whether the companies engaged in practices that are illegal under the province’s Consumer Protection Act.

The class members include: “All persons residing in Quebec whose reputation has been damaged because their names were used to attract and/or influence the public through fraudulent, false, and/or misleading advertisements published on Facebook (Meta) that encourage their audience to click on fraudulent links, which portray them as favouring and/or endorsing an investment product and/or service, involving cryptocurrency or otherwise, or an illegal product and/or service that turns out to be a scam.”

Tougher laws to combat fraudsters

The authorization comes two weeks after Barrette testified before a parliamentary committee in Quebec City studying a new bill that aims to crack down on online fraudsters and identity thieves.

On March 26, Justice Minister Simon Jolin-Barrette tabled Bill 24, An Act to protect consumers against the misleading or fraudulent use of a person’s identity or image.

If passed, it would combine the efforts of the Consumer Protection Office and the Financial Markets Authority to grant them new court-like powers.

For example, they could quickly order a company or individual to stop using someone’s image without their consent in a fake advertisement.

If an order is not followed, the case could go to Superior Court, and the violator could be held in contempt of court, a charge that carries jail time.

Fines of up to $125,000 (or five per cent of their global revenue from the previous fiscal year) could also be issued.

During the committee hearing on May 7, Barrette said she is making it her mission to fight identity theft.

She also told legislators that, in her case, she filed complaints with Meta to no avail and even paid to send a bailiff to California.

“I’m still being impersonated, and it happens all the time. I had absolutely no idea what to do,” she said. “As victims, we feel abandoned.”

With files from The Canadian Press