Perhaps you remember me writing about those damn fake celebrity endorsements that were constantly popping up here and pretty well everywhere else on the internet for a while. If you do, chances are you may be interested in this long article about Ads Inc., one of the companies seemingly responsible for a lot of them. How A Massive Facebook Scam Siphoned Millions Of Dollars From Unsuspecting Boomers
Asher Burke built his company, Ads Inc, on the back of one of the internet’s most persistent, lucrative, and sophisticated scams — the subscription trap. And then it all fell apart.
In this case, “fell apart” means that the company tried and ultimately failed to go legit a couple times, its head was killed in a helicopter crash and it ended up shutting down at least for now in part because of this story and the doom it was likely to bring.
The focus here is largely on scams run through Facebook, but there are tentacles everywhere that affect many other advertising platforms including Google, which does our ads for us.
Do I think the death of Ads Inc. will be the end of shadiness like this? Of course not. There’s always somebody willing to step up and fill the void as long as the money is there, and from the sounds of it (spending $30,000 to bring in $70,000, for instance), the money is most definitely there. But I’ll go ahead and call this a good catch just based on the size and volume of the operation.
You don’t know Ads Inc., but you may have seen one of its ads on Facebook: a tabloid-style image that claims a celebrity has been caught saying or doing something scandalous that puts their career or life in jeopardy. The ad leads to a webpage that mimics a media brand such as TMZ, Fox News, or People magazine. But it’s all fake: the “news” article, the website, and the additional claim that this star has, for example, discovered an amazing new skin cream that you can try for a small fee. The fake celebrity scandal hinted at in the ad is the hook that gets people to click so they can be pitched on what appears to be a no-risk, product trial for a small shipping fee, such as $4.99.
Within a week or two of making that payment, another, much higher, charge appears on customers’ credit cards — because they have been enrolled in an expensive monthly subscription.
“You get a free trial and then you get rebilled. They say you can cancel but the 800 number is pretty hard to get through and pretty much the only way to go about it is canceling the credit card,” said the Ads Inc. employee.
Subscription traps, also called free trial scams, have long been a bane of the FTC: Over the past decade, the agency has gone after perpetrators who’ve stolen more than $1.3 billion.
Like emails from a Nigerian prince, the subscription trap is one of the most enduring — and wildly profitable — scams. Over time it has evolved in a way that exploits key aspects of the digital media ecosystem. It is a harmony of attention capture, seedy digital advertising, audience targeting and optimization, clickbait, user interface design, e-commerce, and insatiable greed. Like so many of our current digital ills, it targets vulnerable people on the biggest and most profitable digital platforms — such as Facebook — and authorities have proven largely ineffective at stopping it.
“This is clearly a massive worldwide problem,” said Steve Baker, who spent two decades investigating scams at the FTC and now runs the Baker Fraud Report, a website that reports on consumer fraud. Last December, he published a detailed report on subscription traps for the Better Business Bureau, which found that most people are charged roughly $100 by the time they’ve figured out what had happened.
“There are millions of victims of this, certainly,” he told BuzzFeed News.
The Ads Inc. employee said its victims often have one thing in common: age.
“There is one demo that this workflow is targeted towards, and that’s baby boomers,” they said. “You run this toward anyone else, and it’s a disaster. But you do this fake news shit with a trial offer scam and you send it to somebody that’s not that savvy [and it works].”
The Ads Inc. employee said the key is to take a celebrity older people like and find a product that matches their image.
“I like to say Willie Nelson is a fount of profit. You slap his face on a CBD offer on a site that looks like Fox News, and it sells itself. Everyone likes Willie and knows he likes marijuana,” they said.