Meta’s Scam Ads Are Finally Being Challenged — And It’s Long Overdue
After years of warnings from consumer advocates, regulators and defrauded users, Meta Platforms is finally being dragged into court over what critics say has been an open-secret business model: knowingly allowing scam advertisements to run across Facebook and Instagram in the name of profit.
The U.S. Virgin Islands has filed a lawsuit against the social media giant, alleging Meta deliberately profited from scam advertising while publicly claiming its platforms were safe for users, parents and children.
The lawsuit accuses Meta of misleading regulators and the public, while quietly tolerating fraudulent ads that generate revenue and boost engagement — money that ultimately helps fund the company’s broader ambitions, including its aggressive push into artificial intelligence.
Recent independent testing has only reinforced those concerns. Australian investigations found that even blatantly obvious scam ads — the kind visible to the naked eye as fraudulent — were repeatedly reported and still left online.
Tech Business News identified and tested at least ten separate scam advertisements circulating on Facebook advertising, all published by entities operating behind fake or non-legitimate profiles specifically created to facilitate online fraud.
Before drawing any conclusions, Tech Business News undertook a careful verification process to ensure the advertisements in question were unequivocally fraudulent or deceptive.
While several ads were immediately recognisable as scams, others involved more sophisticated tactics, including the use of deepfake imagery and fabricated endorsements designed to mislead users and create a false sense of legitimacy.
In each instance, the advertisements were formally reported through the platform’s fraud reporting channels. The outcome was consistent and unambiguous.
Despite clear indicators of deception, the response provided was that the advertisements did not breach the platform’s Community Standards and would therefore remain active.
More concerning still, some of the same scam advertisements reappeared multiple times, published under different accounts but using identical creative material and messaging. The repeat reports also failed to result in enforcement action, even after the ads had been flagged on more than one occasion.
The findings raise serious questions about the effectiveness of current ad review and enforcement processes, particularly as scam operators increasingly rely on disposable accounts, impersonation tactics and AI-generated content to evade detection while continuing to reach large audiences through paid advertising.
Compounding the problem, Meta operates no “meaningful or effective” pre-vetting or screening process to ensure advertisements are legitimate before they are shown to millions of users.
In response to the lawsuit, Meta spokesman Andy Stone referred Reuters to previous company statements dismissing claims that the company failed to protect users as “baseless.”
That defence, however, is wearing thin. Regulators and consumer advocates argue that Meta’s systems are not broken — they are working exactly as designed, optimised for revenue first and harm reduction second.
For years, Meta has positioned itself as a neutral platform battling bad actors at scale. The lawsuit paints a far less flattering picture: a Silicon Valley behemoth that critics say has knowingly enabled scammers, pocketed the proceeds, and treated fraud as an acceptable cost of doing business.
This is one of the world’s most powerful technology companies, capable of building advanced AI models and global ad-targeting systems, yet apparently unable — or unwilling — to stop obvious fraud unless it is nearly mathematically certain
For many observers, the case represents a long-overdue attempt to hold Meta accountable — not just for what happens on its platforms, but for what it allows to happen when profit is on the line.
According to documents, Meta internally projected in late 2024 that roughly 10 per cent of its total annual revenue — an estimated US$16 billion — would come from what it bluntly labels “violating revenue.” That category explicitly includes scam advertisements and promotions for products and services that breach Meta’s own policies.
In other words, fraud is not slipping through the cracks. It is being measured.
The scale of this operation is staggering. One internal document dated December 2024 reveals that Meta’s platforms serve users an estimated 15 billion “higher-risk” scam ads every single day.
These include blatantly fraudulent e-commerce offers, fake investment schemes, illegal online gambling promotions and ads for banned medical products — content that should never reach users in the first place.
The relentless flood of scam advertising is not accidental, and it is not without reward. Another internal document cited by Reuters indicates Meta generates approximately US$7 billion per year from higher-risk ads alone.
That revenue flows directly into the same corporate machine Meta claims is fighting fraud — and into the funding pool for its next generation of AI products and infrastructure.
For critics, the documents dismantle Meta’s long-standing defence that scam ads are an unfortunate by-product of scale. Instead, they suggest a company that has normalised fraud as a predictable, profitable line item — a cost of doing business that is not just tolerated, but monetised.
When a platform can quantify scam exposure down to the billions and still allow it to continue, the question is no longer whether Meta can stop the problem. It is whether it has any financial incentive to do so.
Meta’s 95% Excuse: When Fraud Isn’t Certain Enough to Stop Making Money
Meta’s preferred defence is automation — and buried inside that automation is a conveniently generous loophole. The company’s ad enforcement systems are designed to act only when there is at least a 95% that an advertiser is fraudulent.
Anything less is not treated as fraud, but as a revenue and cash grab opportunity.
Advertisers that fall below this threshold are quietly parked in a grey zone, internally classified as “suspicious” or “likely scammers,” yet allowed to continue operating.
Their ads stay live, their campaigns keep running, and Meta keeps collecting money. Fraud, it seems, is only unacceptable when it becomes statistically inconvenient.
Rather than removing these questionable advertisers, Meta applies higher advertising costs to them. This so-called penalty pricing does not deter bad actors — it monetises them.
By forcing suspected scammers to bid more aggressively for ad placement, Meta extracts greater revenue per impression than it would from legitimate advertisers, turning risk into profit.
The system becomes even more forgiving when real money is involved. Internal documents show that small advertisers may be blocked after being flagged for financial fraud as few as eight times.
High-spending advertisers, however, operate under an entirely different set of rules. Some so-called High Value Accounts were reportedly allowed to accumulate hundreds of fraud strikes — in some cases more than 500 — without being shut down.
This is not an enforcement failure. It is a two-tier system designed to protect the most lucrative streams of violating revenue. Meta’s policies may talk about safety and integrity, but its internal mechanics tell a simpler story: when fraud pays well enough, it gets a very long leash.
Meta vs Google: When Fraud Is a Policy Choice, Not an Industry Problem
The failures exposed in Meta’s internal documents cannot be dismissed as the unavoidable cost of running a large advertising platform. A direct comparison with Google — its closest and most relevant competitor — reveals something far more uncomfortable: fraud enforcement is a choice, and Meta has chosen revenue.
The most damaging admission does not come from critics or regulators, but from Meta’s own engineers. An internal review conducted in April 2025, examining online communities where fraudsters actively trade tactics, reached a blunt and damning conclusion: “It is easier to advertise scams on Meta platforms than Google.”
The numbers support that assessment.
According to Google’s 2023 Ads Safety Report, released the following year, the company blocked or removed 5.5 billion bad ads and suspended 12.7 million advertiser accounts, nearly double the number from the year before. Google’s approach is unambiguous: remove the ad, remove the advertiser, and cut off the revenue stream entirely.
Meta, by contrast, paints a very different picture. A company spokesman claimed Meta removed 134 million pieces of scam ad content in 2025 — a figure that sounds impressive until it is placed in context.
Meta focuses on removing individual ads while often leaving the advertiser intact, allowing repeat offenders to continue operating, especially when they generate significant revenue.
The contrast exposes a fundamental philosophical divide. Google’s enforcement is account-centric, designed to eject bad actors from the ecosystem altogether. Meta’s approach is revenue-centric and content-focused, carefully managing scam output rather than eliminating its source.
High Value Accounts, in particular, are shielded by internal guardrails that reportedly allow hundreds of violations — in some cases more than 500 fraud strikes — before meaningful action is taken.
That same divide extends to advertiser verification. According to WordStream, Google operates a mature, centralised verification system that requires advertisers to submit legal documentation identifying who they are and where they operate.
However, The system is far from perfect, but it is mandatory and enforced at scale.
Meta, meanwhile, is still apparently rolling out comparable verification in fragments — typically only after regulators force its hand. A clear example is Australia, where Meta is only now implementing verification requirements for financial advertisers, following sustained pressure from government authorities. It is not proactive enforcement; it is compliance by compulsion.
Together, the comparison undercuts Meta’s long-running narrative that scam ads are an industry-wide problem beyond its control. One platform removes bad actors. The other tolerates them, prices them, and profits from them. The difference is not technological capability — it is corporate priority.
The lawsuit from the U.S. Virgin Islands represents more than just a legal action. It is a direct challenge to Meta’s long-running strategy of denying responsibility while continuing to profit from harm.
If the allegations hold, Meta’s problem is not rogue advertisers — it is that the platform itself has become an enabler. And the longer regulators allow that model to continue, the more victims will pay the price while Meta counts the revenue.
