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Unchecked Spam Ads Infiltrate Facebook, Hijack Dealzon Brand

Over the past few weeks, Facebook users saw a spectacular deal advertised by gadget site Dealzon.com: an iPad 2, for only $11.37. It’s completely fake. A company called GrabSwag.com stole Dealzon’s identity, and now Facebook is facing a bigger problem.

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Over the past few weeks, Facebook users may have noticed one spectacular deal advertised on the social network for discount-gadget site Dealzon.com: an iPad 2, for only $11.37.

There’s just a few issues with the ad: Dealzon has never advertised on Facebook; it has never offered an iPad 2; and it’s certainly never featured such an expensive device for the price of a three-course meal at T.G.I. Friday’s. But the seductive ads on Facebook, which, much to the anger of Dealzon’s owners, falsely feature the brand name “Dealzon.com,” have lured in thousands and thousands of unsuspecting users, and redirected them to GrabSwag.com, a penny auction site that, on the surface, sells high-end electronics for yard-sale prices: iPods for $0.38, flatscreen TVs for $15, and so forth. In actuality, GrabSwag charges users for each bid placed, regardless of whether or not a user wins the auction, meaning GrabSwag will make out with a bundle of cash for every item sold. (In other words, one would have to spend far more than $15 to win a $15 television; in aggregate, losing bidders would give GrabSwag wheelbarrows more than the original item was even worth–for nothing more than the privilege to bid.)

While it’s an awfully misleading moneymaking scheme, the worst part is that Facebook allows such spam to be advertised on its social network. Only days ago, the Better Business Bureau specifically cautioned consumers of misleading practices by GrabSwag, warning that the site “advertises frequently through Facebook pop-up ads and falsely claims BBB Accreditation.” Call it a downside of Facebook’s remarkable growth: With 750 million users and billions of ad dollars earned annually, the company can’t possibly monitor every sponsorship that lands on its web pages. But for the consumers taken advantage of by GrabSwag’s ads and for the brands like Dealzon damaged by GrabSwag’s false advertising, Facebook must do far more to protect its platform from spam and deceptive practices.

“There are thousands of people coming to our site because of this offer–this unbelievable and ridiculous offer for a $12 iPad,” says Ian Ybarra, cofounder of Dealzon. “That’s horribly damaging to our brand.”

Since reporting the spam to Facebook more than two weeks ago, Ybarra and his team have yet to hear anything back, other than receiving an automated response from Facebook. “We feel like it’s going into a black hole,” he says. But Dealzon has received dozens of responses from users clicking on the supposed deal. “You guys are fake, and false advertisers,” read one complaint sent to Dealzon. “You might call it an advertising ploy but most folks call it lying,” read another.

“We’re having to spend human resources on answering all this hate mail,” Ybarra says. “The ads aren’t going away. What do we do now?”

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Ybarra isn’t even quite sure why GrabSwag’s spam features his brand, Dealzon.com, which has no affiliation whatsoever with GrabSwag. He theorizes that GrabSwag has developed a scheme to trick Facebook’s spam detection–that is, when Facebook checks to see whether the ad is spam, it might see that the ad is an offer from Dealzon.com, a legitimate service that tracks deals and coupons at trusted retailers such as Amazon, Newegg, Dell, and HP. “I think they’re using us as a cover,” Ybarra says. “It’s a scam.”

Dealzon wants Facebook to remove the ads and improve its fraud prevention, but has had no luck getting in touch with the company. The team has since invested in responding to user complaints; it’s added warnings about GrabSwag for consumers redirected to Dealzon from Facebook; and it’s set up alerts on Google Analytics to monitor for any visitor spikes from Facebook, which Ybarra now refers to as “abusive traffic.” He suggests other online businesses do the same to protect their own brands.

Facebook has not responded with specifics to Fast Company‘s requests, either. “Facebook is looking into this matter right now as they aren’t sure what is going on yet,” said a spokesperson, who took several days to respond. “At this point, what I can tell you is Facebook doesn’t allow ads with deceptive practices (in fact, they are in violation of our advertising policies) and has methods to take down such ads when the team is made aware. In some cases, a few may slip through the cracks but when we find them or people alert us to bad ads, we remove them from Facebook.”

The company has a dedicated team that looks into complaints and requests from companies like Dealzon, but it appears the team is not large enough, or, at the very least, unacceptably slow in responding to such issues.

Ybarra isn’t holding his breath for a response either, at this point.

“This is such a small blip,” he says. “GrabSwag is banking on Facebook not catching its ads, or not caring about them, because every time someone clicks on its ads, Facebook is still making money. Facebook really doesn’t have an incentive to shut this down–we’re not such a huge company that it would cause such a huge outcry that people would actually know about it. We’re not ginormous–we only have such a big voice. GrabSwag is paying for the clicks, and Facebook is collecting money each time.”

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“So they can just ignore it and hope no one notices,” he adds.

Follow @fastcompany.

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About the author

Austin Carr writes about design and technology for Fast Company magazine.

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