US Senators Urge Federal Probe Into Meta Over Scam-Linked Advertising
Two US senators have called for federal regulators to investigate Meta Platforms following a Reuters report revealing that the company earns billions from ads linked to scams and banned products on Facebook and Instagram.
Lawmakers Demand Action from FTC and SEC
In a joint letter to the heads of the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC), Senators Josh Hawley and Richard Blumenthal urged both agencies to launch investigations into Meta’s advertising practices. The lawmakers said regulators should compel Meta to return any profits made from illicit ads, pay penalties, and commit to ending such practices.
“The FTC and SEC should immediately open investigations and, if the reporting is accurate, pursue vigorous enforcement action where appropriate,” the senators wrote.
The call follows a Reuters investigation citing internal Meta documents from late 2024 that estimated the company expected to earn about 10% of its revenue that year — roughly $16 billion — from illicit advertising. The same documents stated that Meta made around $3.5 billion every six months from “higher-risk” scam ads.
Meta Denies Allegations, Lawmakers Remain Skeptical
Meta has rejected the claims, saying it has reduced scam reports by 58% in the past 18 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.”
However, Hawley, a Republican from Missouri, and Blumenthal, a Democrat from Connecticut, questioned the company’s commitment to tackling the problem. They pointed to Meta’s public “Ad Library,” which they said still features ads for illegal gambling, crypto scams, deepfake sex content and fake government benefit offers.
Citing Billions in Losses to Scams
The senators noted that Meta’s internal estimates suggest its platforms are involved in about a third of all scams in the US. The FTC reported that Americans lost $158.3 billion to scams last year, implying that more than $50 billion in consumer losses may be tied to Meta’s platforms.
They also accused Meta of prioritising generative AI development while cutting its safety staff, including personnel responsible for FTC-mandated reviews. “Scams have been allowed to take over Facebook and Instagram,” the letter stated.
Deepfake and Political Scam Ads Raise Concerns
Blumenthal and Hawley highlighted particular concern about fraudulent ads impersonating government officials and political figures. One cited example involved a fake advertisement claiming former President Donald Trump was giving $1,000 to food assistance recipients.
“While Meta has been warned about advertisement deepfakes impersonating politicians, it still continues to run fraudulent clips,” the senators wrote. They said many of the scam beneficiaries were linked to cybercrime networks based in China, Sri Lanka, Vietnam and the Philippines.
The senators’ demand for coordinated federal action adds pressure on Meta as scrutiny intensifies over the spread of scams and misinformation on its platforms.
with inputs from Reuters