US senators call for probe of scam ads on Facebook and Instagram

U.S. senators Josh Hawley and Richard Blumenthal have asked the heads of the Federal Trade Commission and the Securities and Exchange Commission to probe Meta Platforms, following a Reuters report about the social media giant’s revenue from ads on Facebook and Instagram that promote scams and banned goods.

“The FTC and SEC should immediately open investigations and, if the reporting is accurate, pursue vigorous enforcement action where appropriate” to force Meta to disgorge profits, pay penalties and agree to cease running such advertisements, Hawley and Blumenthal wrote in a letter to the federal agencies.

Earlier this month, Reuters reported that internal documents from late 2024 stated that that year – about $16 billion – from illicit advertising. One document noted Meta earns $3.5 billion in revenue from “higher risk” scam ads every six months. Other documents stated that Meta’s anti-fraud rules didn’t appear to apply to many ads that regulators and the company’s own staff believed “violated the spirit” of its rules against scam advertising.In response to the Reuters report, Meta said it had reduced user reports of scams by 58% over the last eighteen months.

The Hawley-Blumenthal letter “makes claims that are exaggerated and wrong,” Meta spokesman Andy Stone said. “We aggressively fight fraud and scams because people on our platforms don’t want this content, legitimate advertisers don’t want it and we don’t want it either.”

Hawley, a Republican from Missouri, and Blumenthal, a Democrat from Connecticut, expressed skepticism about Meta’s efforts to combat illicit advertising. They pointed to thecompany’s “ad library,” a publicly accessible database of advertising that appears on Meta’s social-media platforms.”Even a short review of Meta’s Ad Library at the time of this letter shows clearly identifiable advertisements for illicit gambling, payment scams, crypto scams, AI deepfake sex services, and fake offers of federal benefits,” they wrote.

The senators cited Reuters reporting that Meta itself estimated its platforms were involved in a third of all scams in the U.S., and went on to note that the FTC estimates Americans lost $158.3 billion to scams last year.

“This would suggest Meta was responsible for more than $50 billion in consumer loss,” they wrote. Their letter alleges that Meta has consciously chosen to accept ads that promote fraudulent activities.

“Scams have been allowed to take over Facebook and Instagram as Meta has drastically cut its safety staff, including for FTC mandated reviews, even as it dumps unimaginable sums into its generative AI projects.”

Blumenthal and Hawley expressed particular concern about fake ads purporting to represent the U.S. government or political figures. They cited an example of a bogus ad that claimed President Donald Trump was offering $1,000 to recipients of food assistance.

“While Meta has been warned about advertisement deepfakes impersonating politicians, it still continues to run fraudulent clips,” their letter states. “The beneficiaries of these scams are often cybercrime groups based in China, Sri Lanka, Vietnam and the Philippines.”