(Reuters &WSJ) Meta Platforms Inc. META -1.55% has fired or disciplined more than two dozen employees and contractors over the last year whom it accused of improperly taking over user accounts, in some cases allegedly for bribes, according to people familiar with the matter and documents viewed by The Wall Street Journal.
Some of those fired were contractors who worked as security guards stationed at Meta facilities and were given access to the Facebook parent’s internal mechanism for employees to help users having trouble with their accounts, according to the documents and people familiar with the matter.
The mechanism, known internally as “Oops,” has existed since Facebook’s early years as a means for employees to help users they know who have forgotten their passwords or emails, or had their accounts taken over by hackers.
As part of the alleged abuse of the system, Meta says that in some cases workers accepted thousands of dollars in bribes from outside hackers to access user accounts, people and documents say.
The disciplinary actions are part of a lengthy internal probe led by Meta executives, according to the documents and one of the people.
“Individuals selling fraudulent services are always targeting online platforms, including ours, and adapting their tactics in response to the detection methods that are commonly used across the industry,” said Meta spokesman Andy Stone. He added that the company “will keep taking appropriate action against those involved in these kinds of schemes.”
A spokeswoman for Meta’s security contractor, Allied Universal, said it “takes seriously all reports of violations of our standards of conduct.”
The firings and disciplinary measures illustrate the vast and complicated problem Meta has supporting more than 3 billion users across its platforms with virtually no customer service, a function the company has said that it is committed to building out in the coming years.
When people are locked out of their accounts, they typically try automated methods for resetting them or try to reach someone at Meta by phone or email, which many users have reported is often fruitless. Some of those people are able to get Meta employees and contractors to fill out a form through the Oops channel as a method of last resort.
Oops, an acronym for Online Operations, is supposed to be fairly limited to special cases, like friends, family, business partners, and public figures, but its usage has climbed along with employee headcount. In 2020, the channel serviced about 50,270 tasks, up from 22,000 three years earlier, according to an internal document reviewed by the Journal.
To file an Oops report, the employee or contractor lists an email address that they would like to associate with the Facebook or Instagram account being reset.
They must also answer a series of questions—indicating, for example, if the request is being made for someone on CEO Mark Zuckerberg’s team, a celebrity, a family member, or a Meta partner, according to documents viewed by the Journal.
The request is then routed to Meta’s community support team.
Because so many people depend on social media for their businesses, or to manage critically important aspects of their lives, gaining illicit control of an account can be lucrative. Stolen Facebook and Instagram handles can be sold for tens of thousands of dollars on other online forums.
But in part, because the Oops system is off limits to the vast majority of Facebook users, a cottage industry of intermediaries has developed who charge users money to regain control of their accounts. In interviews with the Journal, some of those third parties claim to have access to Meta employees to help reset accounts.
“When you take someone’s Instagram account down that they’ve spent years building up, you’re taking away their whole means of generating an income,” says Nick McCandless, whose company McCandless Group operates a platform for content creators. Mr. McCandless says he charges his clients to reset accounts, sometimes through contact, he declined to name at Meta.
“You really have to have someone on the inside who will actually do it,” he said.
Brooke Millard, an Orange County-based model with about 650,000 Instagram followers, paid about $7,000 to Mr. McCandless to retrieve her account, after she couldn’t access it for reasons she didn’t understand in December 2021. She said she didn’t ask much about his process.
“I knew obviously it wasn’t him that was doing something,” she said. “He obviously had a connection.”
Mr. Stone, the Meta spokesman, said buying or selling accounts or paying for an account recovery service is a violation of the social network’s terms of service.
Meta is also investigating some former employees for remaining in contact with other workers, allegedly to hijack user accounts. In July, an attorney on behalf of Meta sent a letter to one former security contractor who was fired in 2021, Kendel Melbourne, alleging that he assisted “third parties to fraudulently take control over Instagram accounts,” including after he left the company, according to a copy of the letter.
Meta demanded Mr. Melbourne provide a detailed list of user accounts he had attempted to reset and the money he made doing so.
In the July letter, Meta accused Mr. Melbourne of violating the federal Computer Fraud and Abuse Act and said he has been banned from Facebook and Instagram.
Mr. Melbourne worked at Allied Universal, where security guards were given login credentials to Facebook’s intranet, according to documents and people familiar with the matter. Although it wasn’t covered in training, that access included the ability to request account resets via the company’s internal Oops system. In an interview, Mr. Melbourne described Oops as a perk of the job.
“They didn’t have any set of rules or give you a class on what to expect,” Mr. Melbourne said.
In an email response to the Meta attorney, Mr. Melbourne denied committing fraud and said he reset about 20 accounts on behalf of friends, family, and people he trusted.
“Unfortunately I have fallen [sic] victim to thinking I was helping people retrieve their accounts,” he said in the response to the attorney. “I will take responsibility for that.”
Meta employees and contractors are given some training on how to use Oops as part of onboarding to the company, and anytime someone files a task in the Oops channel, the system warns employees to be wary of phishing attempts.
Another Allied Universal contractor, Reva Mandelowitz, was fired in February after an internal investigation found that she allegedly reset multiple user accounts on behalf of hackers, receiving thousands of dollars in bitcoin for her services, according to people familiar with the matter and documents viewed by the Journal.
In an interview, Ms. Mandelowitz denied wrongdoing, saying she requested about 20 account resets for friends and family. An unknown person reached out to her online and asked her to do more account resets in January, and then began a campaign of harassment when she refused to cooperate, she said.
Lately, Allied has cracked down on its employees’ use of internal systems, warning in a recent internal message viewed by the Journal “DO NOT use the Meta OOPS platform.”
The number of Americans filing new claims for unemployment benefits fell last week, showing widespread layoffs remain low despite a surge in technology-sector job cuts that have raised fears of an imminent recession.
The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy's health, suggested the labor market remained tight. That, together with solid consumer spending, keeps the Federal Reserve on track to continue raising interest rates, though at a slower pace amid signs inflation was starting to subside.
"This is a testimony to how tight the labor market remains," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 222,000 for the week ended Nov. 12. Economists polled by Reuters had forecast 225,000 claims for the latest week.
There has been an increase in layoffs in the technology sector, with Twitter, Amazon (AMZN.O), and Meta (META.O), the parent of Facebook, announcing thousands of job cuts this month. Companies in interest-rate-sensitive sectors like housing and finance are also letting workers go.
The layoffs have so far not been evident in official data. Unadjusted claims dropped from 6,101 to 199,603 last week. Claims in California, the epicenter of the technology job cuts, rose by only 302 last week. Big decreases in claims were reported in Florida, Georgia, Kentucky, Indiana, and Texas, offsetting notable increases in Minnesota and North Carolina.
Economists say businesses outside the technology and housing sectors are hoarding workers after difficulties finding labor in the aftermath of the COVID-19 pandemic. With 1.9 job openings for every unemployed person in September, some of the workers being laid off are probably finding new employment quickly.
Economists at Goldman Sachs dismissed worries that the technology layoffs were flagging an imminent recession in a note this week. They argued that technology job openings remained well above their pre-pandemic level, also noting layoffs in the sector have not historically been a leading indicator for deterioration in the overall labor market.
The Fed has raised its policy rate by 375 basis points this year from near zero to a 3.75%-4.00% range as it battles to bring inflation back to the U.S. central bank's 2% target in what has become the fastest rate-hiking cycle since the 1980s.
Financial markets are betting that the Fed will shift down to a half-percentage-point rate hike at its Dec. 13-14 policy meeting, according to the CME Group's FedWatch Tool.
So far, the economy is weathering the tighter monetary policy storm, with data on Wednesday showing strong retail sales growth last month. This has led economists to expect that the policy rate could see increases for a long period, eventually reaching a higher level that will be maintained for a while.
Stocks on Wall Street were trading lower. The dollar rose against a basket of currencies. U.S. Treasury prices fell.
HOUSING MARKET STRUGGLING
The claims data covered the week during which the government surveyed business establishments for the nonfarm payrolls component of November's employment report.
Claims rose marginally between the October and November survey periods, suggesting another month of solid job growth. The economy created 261,000 jobs in October.
Next week's data on the number of people receiving benefits after an initial week of aid will shed more light on November's employment report. The so-called continuing claims, a proxy for hiring, increased from 13,000 to 1.507 million in the week ending Nov. 5, the highest level since March.
Economists viewed the rise as mostly technical.
"Little has changed in the labor market in early November," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
But the housing market is crumbling under the weight of higher borrowing costs, while manufacturing is cooling. Factory activity in the mid-Atlantic region declined further in November, a report from the Philadelphia Fed showed.
A third report from the Commerce Department showed housing starts decreased 4.2% to a seasonally adjusted annual rate of 1.425 million units last month. Starts dropped 8.8% on a year-on-year basis in October.
Single-family housing starts, which account for the biggest share of homebuilding, tumbled 6.1% to a rate of 855,000 units, the lowest level since May 2020. Single-family homebuilding declined in all four regions.
Starts for housing projects with five units or more slipped 0.5% to a rate of 556,000 units. Multi-family housing construction has fared better as soaring mortgage rates force many potential homebuyers to remain renters. A key gauge of rents surged by the most on record on a year-on-year basis in October, according to the latest consumer price data.
The 30-year fixed mortgage rate is averaging above 7%, the highest level since 2002, according to data from mortgage finance agency Freddie Mac. A survey on Wednesday showed confidence among single-family homebuilders fell for an 11th straight month in November.
Permits for future home construction decreased 2.4% to a rate of 1.526 million units in October. Single-family building permits dropped 3.6% to a rate of 839,000 units, also the lowest level since May 2020. Permits for housing projects with five units or more slipped 1.9% to a rate of 633,000 units.
The number of single-family homes under construction fell, while the stock of completed houses was the lowest since January, suggesting supply will remain tight even as demand slows, which could prevent an outright decline in prices.
"Rising borrowing costs and hesitant home builders could make the nationwide housing shortage worsen in the near term if activity cools below 2019 levels," said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina.