Honestly, we are not surprised by this news. Ever since the pandemic, we have noticed that more scams have been disguised as Facebook ads. The recent news report by Reuters confirmed this, as internal documents reviewed by the media show that Meta projected it would earn about 10% of its 2024 annual revenue — roughly US$16 billion — from advertisements linked to scams and banned goods across its platforms.
For at least three years, Meta’s platforms — including Facebook, Instagram and WhatsApp — were found to serve a flood of fraudulent or “high-risk” ads: from investment schemes and illegal e-commerce to banned medical products and online casinos. A December 2024 presentation cited by Reuters estimated that users were shown as many as 15 billion “higher-risk” scam advertisements per day.
Internal Enforcement Limits Exposed
The documents show Meta only enforced advertiser blocks when the company’s automated systems estimated fraud with 95% certainty. Advertisers falling below that threshold often had to pay higher ad rates rather than face blocking — a tactic referred to as “penalty bids.” Meta also reportedly placed a revenue protection cap on enforcement: the team vetting questionable advertisers was instructed not to take actions that could cost more than 0.15% of Meta’s total revenue.
Impact on Users and Regulators
Because Meta’s ad-personalisation system would show users more ads similar to those they clicked or engaged with, victims of one scam could become exposed to many more. Reuters cited internal estimates that Meta earns about US$7 billion annually from scam ads.
The platforms were also implicated in roughly a third of all successful scams in the U.S., according to analyst commentary in the documents. Regulators in the U.S. and U.K. are increasingly scrutinising Meta’s ad ecosystem, especially given the scale of exposure and the company’s role as a preferred ad platform for scammers over competitors like Google LLC due to weaker protections.
Meta’s Response and Next Steps
Meta spokesperson Andy Stone responded that the documents reflect “selective views” of the company’s efforts and insisted that Meta “aggressively fights fraud and scams.” However, the documents suggest the enforcement strategy prioritised avoiding revenue loss over broad-based advertiser vetting.
Meta’s leadership reportedly planned to reduce the proportion of revenue from scam and banned-goods ads, from about 10.1% in 2024 to 7.3% by the end of 2025, and further to 6% by 2026.
So What Now?
For users, this investigation highlights how major digital platforms can benefit financially from ad-based revenue models even when those ads expose millions to fraud. For advertisers and regulators, the findings raise urgent questions about accountability, ad-market transparency, and the ethical implications of algorithm-driven monetisation strategies.
As Meta faces mounting pressure to reform its ad ecosystem, the leaked documents may serve as a powerful catalyst for regulatory action, consumer lawsuits, and industry-wide calls for greater oversight. Stay tuned for more trending tech news at TechNave.com.
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