Senators Ruben Gallego and Bernie Moreno have introduced the Safeguarding Consumers from Advertising Misconduct Act to force online platforms to actively prevent fraudulent advertisements from reaching their users. This bipartisan legislation follows reports that major tech companies are generating billions in revenue from deceptive ads while consumers suffer significant financial losses.
The recently introduced SCAM Act aims to hold social media companies accountable for the predatory advertisements hosted on their platforms. By requiring these companies to take reasonable steps to block deceptive content, the bill addresses a growing crisis where Americans are losing billions of dollars to online fraud. Lawmakers argue that current regulations are insufficient, allowing platforms to profit from illegal schemes without facing any meaningful consequences.
The legislative push was largely motivated by internal documents suggesting that companies like Meta failed to stop ads linked to illicit products and fraudulent casinos. While some tech giants have disputed the specific numbers reported, the data suggests that a significant portion of annual advertising revenue may be tied to scam content. This revelation has led to widespread bipartisan concern that social media business models are currently incentivizing the spread of harmful misinformation.
Under the provisions of the bill, online platforms would be required to verify the identity of any paid advertiser before their content is allowed to go live. Additionally, the legislation seeks to empower users by providing more effective tools to report suspicious activity directly to the platforms. These measures are designed to close loopholes that have long allowed anonymous fraudsters to operate with impunity across various digital landscapes.
The act also serves to strengthen the enforcement capabilities of the Federal Trade Commission and state-level authorities. Recent data from the FTC indicates that online scams are becoming increasingly prevalent, with social media now serving as the primary point of contact for many financial crimes. By increasing the legal pressure on platforms, the bill aims to ensure that companies cannot ignore the criminal activity occurring on their sites in favor of maintaining high ad revenues.
Ultimately, the sponsors of the bill emphasize that companies profiting from advertisements must bear the responsibility of ensuring those ads are legitimate. Both Gallego and Moreno have stated that the era of social media platforms knowingly enabling scams must come to an end to protect the savings of the American people. The legislation represents a significant step toward modernizing consumer protection laws for the digital age.
Source: Senators Introduce Bill Targeting Social Media Scam Advertisements