Facebook is suing Basant Gajjar (aka LeadCloak) for allegedly selling software that helped bad actors circumvent Facebook’s automated ad review systems and push deceptive ads around COVID-19 and other scams. As the name suggests, LeadCloak’s software allegedly provided cloaking services, a malicious technique Facebook has been fighting for years. According to Facebook’s announcement, LeadCloack’s software also targeted companies like Google, Oath (aka Verizon Media, the parent company of Engadget), WordPress and Shopify.
Cloaking works by showing a company’s ad review system an innocuous product or website and showing users something completely different. According to Facebook, LeadCloak’s software was used to conceal websites with scams related to the coronavirus pandemic, cryptocurrency, pharmaceuticals, diet pills and fake news. Those shady ads showed up on both Facebook and Instagram.
With the lawsuit filed today in a federal court in California, Facebook hopes to also uncover who LeadCloak’s customers are, so that it can take additional enforcement actions against them. While Facebook is just suing one person at the moment, it seems like the company is trying to make an example of ad spoofers. In December, it sued the Hong Kong company ILikeAd, which tricked users into clicking bogus links so it could hijack their accounts. ILikeAd used cloaking, as well as “celeb baiting.”
Still, lawsuits against cloaking scams are pretty rare, as they are often "sophisticated and well organized.” Sadly, this probably isn’t the last COVID-19 ad scam we’ll see.