A New Bill Could Bring Some Much-Needed Clarity to Social Media Platforms' Approach to Scam Ads.
Under the proposed Safeguarding Consumers from Advertising Misconduct (SCAM) Act, social media companies are facing increased scrutiny over their handling of fraudulent ads. The bipartisan bill would require platforms like Meta, Facebook and Instagram's parent company, and Twitter to crack down on advertisements that scam consumers out of millions of dollars.
According to a recent Reuters report, Meta estimated that up to 10 percent of its revenue came from scam ads in 2024 alone. That translates into $16 billion worth of fraudulent ads, including phishing schemes, fake online casinos, and the sale of counterfeit medical products.
However, instead of taking proactive steps to stop these scams, Meta reportedly allowed small-scale scammers to operate on their platform for eight or more ad flags before they were removed. Meanwhile, bigger spenders could accumulate hundreds of strikes without being kicked off the site.
The issue is compounded by reports that executives at Meta and other social media companies have been hesitant to take action against these scams because it might impact their revenue.
The proposed bill aims to change this dynamic. If a company profits from ads on their platform, they will be required to take reasonable steps to prevent fraudulent or deceptive advertisements. Failure to comply could result in civil penalties from the Federal Trade Commission (FTC) and state attorneys general.
Senator Ruben Gallego, who sponsored the bill along with Bernie Moreno, made it clear that companies have a responsibility to protect consumers from ads that scam them out of their money.
"It is critical that we protect American consumers from deceptive ads and shameless fraudsters who make millions taking advantage of legal loopholes," Moreno said. "We can't sit by while social media companies have business models that knowingly enable scams that target the American people."
The stakes are high, with an estimated $196 billion in losses to Americans from scams in 2024 alone. The vast majority of these losses – nearly all of them, some reports suggest – came from seniors.
By taking on scam ads and holding social media companies accountable for their handling of this issue, the SCAM Act could bring much-needed clarity to a critical area of online consumer protection.
Under the proposed Safeguarding Consumers from Advertising Misconduct (SCAM) Act, social media companies are facing increased scrutiny over their handling of fraudulent ads. The bipartisan bill would require platforms like Meta, Facebook and Instagram's parent company, and Twitter to crack down on advertisements that scam consumers out of millions of dollars.
According to a recent Reuters report, Meta estimated that up to 10 percent of its revenue came from scam ads in 2024 alone. That translates into $16 billion worth of fraudulent ads, including phishing schemes, fake online casinos, and the sale of counterfeit medical products.
However, instead of taking proactive steps to stop these scams, Meta reportedly allowed small-scale scammers to operate on their platform for eight or more ad flags before they were removed. Meanwhile, bigger spenders could accumulate hundreds of strikes without being kicked off the site.
The issue is compounded by reports that executives at Meta and other social media companies have been hesitant to take action against these scams because it might impact their revenue.
The proposed bill aims to change this dynamic. If a company profits from ads on their platform, they will be required to take reasonable steps to prevent fraudulent or deceptive advertisements. Failure to comply could result in civil penalties from the Federal Trade Commission (FTC) and state attorneys general.
Senator Ruben Gallego, who sponsored the bill along with Bernie Moreno, made it clear that companies have a responsibility to protect consumers from ads that scam them out of their money.
"It is critical that we protect American consumers from deceptive ads and shameless fraudsters who make millions taking advantage of legal loopholes," Moreno said. "We can't sit by while social media companies have business models that knowingly enable scams that target the American people."
The stakes are high, with an estimated $196 billion in losses to Americans from scams in 2024 alone. The vast majority of these losses – nearly all of them, some reports suggest – came from seniors.
By taking on scam ads and holding social media companies accountable for their handling of this issue, the SCAM Act could bring much-needed clarity to a critical area of online consumer protection.
I'm like "what's new, right?" 
Social media platforms have been dodging responsibility for years when it comes to scam ads. I mean, $16 billion from just 10% of their revenue is wild 
. And the fact that they're still allowing these scammers to operate on their platform for ages before taking action is just frustrating 
.
. It's like, if you're gonna make money from someone's ad, you gotta do some basic research to ensure it's legit 
. And what's with the revenue argument? Are they saying that they don't want to lose a few billion dollars because of scammers? 
Come on!
. I mean, where were all these billions when we needed them most during the pandemic? 
Anyway, I'm glad some senator is finally taking action and pushing for change 
. We need to protect ourselves from these scammers and make sure they can't take advantage of us anymore 
.
... and it got me wondering, do you think we'll ever figure out how to navigate the whole online dating scene without getting catfished or stuff 
. Like, seriously, with all the scammers out there, I'm starting to think we need a whole new set of dating apps just for finding legit people 
... anyway, back to this SCAM Act thingy – I hope they finally do something about those scam ads on social media 
. Anyway, $196 billion lost in scams alone is wild 
meanwhile like what about all the old ppl who get scammed out of their life savings??? thats literally heart breaking 
OMG, can you believe $16 billion worth of fake ad revenue? I mean, it's crazy! 
The SCAM Act is a step in the right direction, but we need to hold these companies accountable too 
. And honestly, how can you call yourself a responsible adult when you're getting taken advantage of by scammers? 
. They're making bank from ads that are designed to part people from their hard-earned cash, and they're only now getting pressure to do something about it? It's like, come on guys, you've been warned for years! The problem is, we've all gotten used to these dodgy ads being a normal part of the online experience. But the truth is, it's not okay 
. We need to hold these companies accountable and make sure they're taking steps to protect us from these scams. It's time for some real change 
.
. And yeah, it's not like this is some kind of partisan issue - we're all on the same side here: keeping our seniors safe and preventing those scammers from making a quick buck off vulnerable people 
.
. I'm all for protecting consumers, but how effective is this going to be? It's like, social media companies are already being forced to take responsibility for their own ad revenue streams... meanwhile, the FTC and state attorneys general just get to slap them with fines when they don't comply 
, forcing companies to take action and protect consumers from these scammers. It's about time someone held them accountable 
!
my grandma got hit by one of these scams last year and it was a total nightmare, so I'm all about holding those companies accountable 
.
. And if they can't be bothered to stop scams, then maybe they shouldn't be profiting from them in the first place 
I mean, $196 billion in losses is a lot of money... especially for seniors who are already struggling 
... between keeping social media companies accountable and not over-regulating them too much 
... it's like, how do we make sure people don't get scammed while also being kind to the companies that are trying to make a living? 
... but at the same time, i'm not holding my breath 
. I'm all for holding them accountable if they don't comply. $196 billion in losses? That's just heartbreaking 
. Companies need to prioritize our safety over their profits. Fingers crossed this bill passes and some real change happens