Thu Feb 05 05:41:32 UTC 2026: # U.S. Senators Introduce Bipartisan Bill to Combat Social Media Advertising Scams

The Story:
U.S. Senators Ruben Gallego and Bernie Moreno have introduced the Safeguarding Consumers from Advertising Misconduct Act (SCAM Act), a bipartisan bill designed to combat fraudulent advertising on social media platforms. The legislation would require social media companies to take “reasonable steps” to verify advertisers and promptly address user reports of scams, or face legal action from the Federal Trade Commission (FTC) and state attorneys general. The bill emerges amidst growing concerns about the prevalence of scams on platforms like Meta, with internal documents reportedly indicating that Meta expected to earn a significant portion of its revenue from illicit ads.

Key Points:

  • The SCAM Act would require social media platforms to verify the identity of advertisers and the “legal existence” of businesses.
  • Platforms must promptly review and act on reports of scams from users or government entities.
  • Non-compliance would be treated as a violation of the FTC’s prohibition of unfair or deceptive business practices.
  • State attorneys general would be authorized to bring civil actions over alleged violations.
  • The bill is endorsed by the American Bankers Association and consumer advocacy organizations, including the AARP.
  • Reuters reported in November 2025 that internal Meta documents indicated the company expected to earn 10% of its 2024 revenue, or about $16 billion, from ads for scams.
  • Meta claims its internal statistics overestimated the proportion of revenue from scams and that it actively fights such activity.

Key Takeaways:

  • The bipartisan support for the SCAM Act highlights the growing political consensus that social media platforms need greater oversight regarding fraudulent advertising.
  • The bill’s focus on verification processes and responsiveness to user reports indicates a move towards holding platforms accountable for the content they host.
  • The legislation’s potential to authorize state attorneys general to bring civil actions could significantly increase the pressure on social media companies to comply.
  • The timing of the bill’s introduction, following reports of Meta’s internal projections and regulatory concerns, suggests a direct response to perceived inaction by the company.

Impact Analysis:

The SCAM Act, if passed, could have significant and long-term implications for the social media landscape. It may force platforms to invest heavily in enhanced verification and monitoring systems, potentially impacting their profitability and business models. Small businesses and individual advertisers might face new hurdles in advertising on social media. Successful implementation of the SCAM Act could reduce the prevalence of online scams, benefiting consumers and legitimate advertisers. However, challenges remain in balancing consumer protection with freedom of speech and the potential for overregulation. The effectiveness of the bill will depend on the FTC’s and state attorneys general’s willingness to enforce its provisions and on the courts’ interpretation of “reasonable steps” required of social media platforms.

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