US senators unveil bill to curb scam ads on social media platforms

Two U.S. senators have introduced bipartisan legislation aimed at forcing social media platforms to take greater responsibility for fraudulent advertising. Senators Ruben Gallego and Bernie Moreno said the proposed Safeguarding Consumers from Advertising Misconduct Act, or SCAM Act, would require platforms to take “reasonable steps” to prevent scam ads or face enforcement by the Federal Trade Commission and state attorneys general.

The bill would mandate verification of advertisers’ identities or the legal existence of businesses, and require platforms to quickly review and act on reports of fraudulent ads. Supporters say social media companies have become a major conduit for online scams by relaxing advertiser checks to protect ad revenues.

The proposal follows a Reuters investigation that cited internal documents at Meta Platforms estimating that scam and illicit ads could account for a significant share of revenue. Meta has disputed those figures and said it actively combats fraud. The legislation is backed by the American Bankers Association and consumer groups such as AARP, and would allow state authorities to bring civil action against non-compliant platforms.