Meta internally projected late last year that it would earn about 10% of its overall annual revenue \u2013 or $16 billion \u2013 from running advertising for scams and banned goods, internal company documents show.<\/p>\n
A cache of previously unreported documents reviewed by Reuters also shows that the social-media giant for at least three years failed to identify and stop an avalanche of ads that exposed Facebook, Instagram and WhatsApp\u2019s billions of users to fraudulent e-commerce and investment schemes, illegal online casinos, and the sale of banned medical products.<\/p>\n
On average, one December 2024 document notes, the company shows its platforms\u2019 users an estimated 15 billion \u201chigher risk\u201d scam advertisements \u2013 those that show clear signs of being fraudulent \u2013 every day. Meta earns about $7 billion in annualized revenue from this category of scam ads each year, another late 2024 document states.<\/p>\n
Much of the fraud came from marketers acting suspiciously enough to be flagged by Meta\u2019s internal warning systems. But the company only bans advertisers if its automated systems predict the marketers are at least 95% certain to be committing fraud, the documents show. If the company is less certain \u2013 but still believes the advertiser is a likely scammer \u2013 Meta charges higher ad rates as a penalty, according to the documents. The idea is to dissuade suspect advertisers from placing ads.<\/p>\n
The documents further note that users who click on scam ads are likely to see more of them because of Meta\u2019s ad-personalization system, which tries to deliver ads based on a user\u2019s interests.<\/p>\n
Meta estimates that it shows its users 15 billion scam ads a day. These screenshots show false ads Meta removed from Facebook after Reuters flagged them. Spice maker McCormick confirmed the ad in its name was fake. Elon Musk, the White House and law firm Hogan Lovells had no comment. Screenshot via REUTERS<\/p>\n
The details of Meta\u2019s confidential self-appraisal are drawn from documents created between 2021 and this year across Meta\u2019s finance, lobbying, engineering and safety divisions. Together, they reflect Meta\u2019s efforts to quantify the scale of abuse on its platforms \u2013 and the company\u2019s hesitancy to crack down in ways that could harm its business interests.<\/p>\n
Meta\u2019s acceptance of revenue from sources it suspects are committing fraud highlights the lack of regulatory oversight of the advertising industry, said Sandeep Abraham, a fraud examiner and former Meta safety investigator who now runs a consultancy called Risky Business Solutions.<\/p>\n
\u201cIf regulators wouldn\u2019t tolerate banks profiting from fraud, they shouldn\u2019t tolerate it in tech,\u201d he told Reuters.<\/p>\n
In a statement, Meta spokesman Andy Stone said the documents seen by Reuters \u201cpresent a selective view that distorts Meta\u2019s approach to fraud and scams.\u201d The company\u2019s internal estimate that it would earn 10.1% of its 2024 revenue from scams and other prohibited ads was \u201crough and overly-inclusive,\u201d Stone said. The company had later determined that the true number was lower, because the estimate included \u201cmany\u201d legitimate ads as well, he said. He declined to provide an updated figure.<\/p>\n
\u201cThe assessment was done to validate our planned integrity investments \u2013 including in combatting frauds and scams \u2013 which we did,\u201d Stone said. He added: \u201cWe aggressively fight fraud and scams because people on our platforms don\u2019t want this content, legitimate advertisers don\u2019t want it and we don\u2019t want it either.\u201d<\/p>\n
“Over the past 18 months, we have reduced user reports of scam ads globally by 58 percent and, so far in 2025, we\u2019ve removed more than 134 million pieces of scam ad content,\u201d Stone said.<\/p>\n
Some of the documents show Meta vowing to do more. “We have large goals to reduce ad scams in 2025,” states a 2024 document, with Meta hoping to reduce such ads in certain markets by as much as 50%. In other places, documents show managers congratulating staffers for successful scam reduction efforts.<\/p>\n
At the same time, the documents indicate that Meta\u2019s own research suggests its products have become a pillar of the global fraud economy. A May 2025 presentation by its safety staff estimated that the company\u2019s platforms were involved in a third of all successful scams in the U.S. Meta also acknowledged in other internal documents that some of its main competitors were doing a better job at weeding out fraud on their platforms.<\/p>\n
\u201cIt is easier to advertise scams on Meta platforms than Google,\u201d concluded an internal Meta review in April 2025 of online communities where fraudsters discuss their trade. The document doesn\u2019t lay out the reasons behind that conclusion.<\/p>\n
The insights from the documents come at a time when regulators worldwide are pushing the company to do more to protect its users from online fraud. In the U.S., the Securities and Exchange Commission is investigating Meta for running ads for financial scams, according to the internal documents. In Britain, a regulator last year said it found that Meta\u2019s products were involved in 54% of all payments-related scam losses in 2023, more than double all other social platforms combined.<\/p>\n
The SEC and the UK regulator didn\u2019t respond to questions for this report. Meta\u2019s Stone referred Reuters to the company\u2019s latest SEC disclosures, which state that the company\u2019s efforts to address illicit advertising \u201cadversely affect our revenue, and we expect that the continued enhancement of such efforts will have an impact on our revenue in the future, which may be material.\u201d<\/p>\n
The regulatory pressure on Meta to do more to fight scams occurs as the company, in a race with competitors, is pouring money into artificial intelligence and plans as much as $72 billion this year in overall capital expenditures. While acknowledging the spending is \u201ca massive amount of capital,\u201d chief executive Mark Zuckerberg has sought to reassure investors that Meta\u2019s advertising business can bankroll it.<\/p>\n
“We have the capital from our business to do this,” he said in July, when announcing that to support AI, Meta was constructing a data center in Ohio that will be the size of New York City\u2019s Central Park.<\/p>\n
In the internal documents, Meta weighs the costs of beefing up its enforcement of scam ads against the toll of financial penalties from governments for failing to protect its users.<\/p>\n
The documents make clear that Meta aims to reduce its illicit revenue stream in the future. But the company is concerned that abrupt reductions of scam advertising revenue could affect its business projections, according to a 2025 document that discusses the impact of \u201cviolating revenue\u201d \u2013 income from ads that violate Meta\u2019s standards, such as scams, illegal gambling, sexual services or dubious health products.<\/p>\n
The documents note that Meta plans to try to cut the share of Facebook and Instagram revenue derived from scam ads. In the meantime, Meta has internally acknowledged that regulatory fines for scam ads are certain, and anticipates penalties of up to $1 billion, according to one internal document.<\/p>\n
But those fines would be much smaller than Meta\u2019s revenue from scam ads, a separate document from November 2024 states. Every six months, Meta earns $3.5 billion from just the portion of scam ads that \u201cpresent higher legal risk,\u201d the document says, such as those falsely claiming to represent a consumer brand or public figure or demonstrating other signs of deceit. That figure almost certainly exceeds \u201cthe cost of any regulatory settlement involving scam ads.\u201d<\/p>\n
Rather than voluntarily agreeing to do more to vet advertisers, the same document states, the company\u2019s leadership decided to act only in response to impending regulatory action.<\/p>\n
Stone disputed the strategy documents\u2019 assertions that Meta should only act if forced. That isn\u2019t the company\u2019s policy, he said.<\/p>\n
“It is easier to advertise scams on Meta platforms than Google.”
\nInternal Meta review from April 2025.<\/p>\n
Meta has also placed restrictions on how much revenue it is willing to lose from acting against suspect advertisers, the documents say. In the first half of 2025, a February document states, the team responsible for vetting questionable advertisers wasn\u2019t allowed to take actions that could cost Meta more than 0.15% of the company\u2019s total revenue. That works out to about $135 million out of the $90 billion Meta generated in the first half of 2025.<\/p>\n
\u201cLet\u2019s be cautious,\u201d wrote the manager overseeing the effort, noting that the allowed revenue hit included both scam ads and \u201cbenign\u201d ones that were mistakenly blocked. \u201cWe have specific revenue guardrails.\u201d<\/p>\n
Meta\u2019s Stone said that the 0.15% figure cited came from a revenue projection document and was not a hard limit.<\/p>\n
Amid intensifying pressure to do more to combat scams on Meta\u2019s platforms, executives presented Zuckerberg with a plan in October 2024 for what they called a moderate approach to scam enforcement. Instead of a rapid crackdown, the company would focus its efforts on countries where it feared near-term regulatory action, according to a document that outlined the strategy.<\/p>\n
Following the meeting with the CEO, Meta executives in charge of enforcing the integrity of the company’s platforms settled on trying to reduce the percentage of revenue attributable to scams, illegal gambling and prohibited goods from an estimated 10.1% in 2024 to 7.3% by the end of 2025. By the end of 2026, Meta aims to further cut that figure to 6%, and then to 5.8% in 2027, the strategy memo and other documents show.<\/p>\n
<\/p>\n
An excerpt from a November 2024 strategy document discussing Meta\u2019s scam ad revenue and legal risks. Screenshot via REUTERS<\/p>\n
A surge in online fraud<\/p>\n
In 2022, a document from that year notes, Meta discovered a six-figure network of accounts pretending to be members of the U.S. military deployed in war zones. The accounts were sending millions of messages a week trying to charm Facebook users into losing their money. Sextortion \u2013 in which scammers obtain sexual images of a user, often a teenager, under false pretenses and then blackmail them \u2013 also was becoming commonplace on Meta\u2019s platforms. And a torrent of fake accounts pretending to be celebrities or represent major consumer brands were bamboozling users worldwide.<\/p>\n
But despite the surge in online fraud, another 2022 document notes the company\u2019s \u201clack of investment\u201d in automated scam detection back then. Meta classified scam ads as a \u201clow severity\u201d problem \u2013 viewing them as a bad \u201cuser experience,\u201d the document says.<\/p>\n
Internal documents show that Meta directed staffers then to focus mainly on fraudsters masquerading as celebrities and usurping major brands. Such \u201cimpersonation scams\u201d risked upsetting advertisers and public figures, one 2022 document notes, and thus threatened to reduce user engagement and revenue.<\/p>\n
But ongoing layoffs at Meta were hindering enforcement. A planning document for the first half of 2023 notes that everyone who worked on the team handling advertiser concerns about brand-rights issues had been laid off. The company was also devoting resources so heavily to virtual reality and AI that safety staffers were ordered to restrict their use of Meta\u2019s computing resources. They were instructed merely to \u201ckeep the lights on.\u201d<\/p>\n
Stone said that while layoffs had occurred, the company had substantially expanded the number of staff addressing scam advertising in recent years.<\/p>\n
Meta also was ignoring the vast majority of user reports of scams, a document from 2023 indicates. By that year, safety staffers estimated that Facebook and Instagram users each week were filing about 100,000 valid reports of fraudsters messaging them, the document says. But Meta ignored or incorrectly rejected 96% of them.<\/p>\n
Meta\u2019s safety staff resolved to do better. In the future, the company hoped to dismiss no more than 75% of valid scam reports, according to another 2023 document.<\/p>\n
Erin West, a former Santa Clara County prosecutor who now runs a nonprofit devoted to combating scams, said Meta\u2019s default response to users flagging fraud was to ignore them.<\/p>\n
\u201cI don\u2019t know I\u2019ve ever seen something taken down as the result of a single user report,\u201d she said.<\/p>\n
Last October, a recruiter for the Royal Canadian Air Force woke up to find herself locked out of her Facebook account. The woman, who spoke on condition of anonymity because of her military status, had been hacked.<\/p>\n
Soon a picture of a fake employment badge with her face on it appeared on her account \u2013 along with the text, \u201cI\u2019m super happy to announce I\u2019m crypto currency certified.\u201d<\/p>\n
<\/p>\n
A sign at Meta headquarters in Menlo Park, California. \u201cWe aggressively fight fraud and scams because people on our platforms don\u2019t want this content, legitimate advertisers don\u2019t want it and we don\u2019t want it either,\u201d says spokesman Andy Stone. REUTERS\/Carlos Barria<\/p>\n
The recruiter said she immediately filed multiple reports with Meta. As weeks went by without a response, her account began claiming that she had struck it rich with crypto \u2013 even acquiring land for a dream home \u2013 and she wanted to give her friends the same opportunity.<\/p>\n
The recruiter said her supervisor tried to get the Royal Canadian Mounted Police to help, but was told that Meta doesn\u2019t usually respond to hacked-account reports from the Mounties. So the recruiter warned her friends not to interact with her account and asked them to report her account to Meta, too.<\/p>\n
Asked about the incident, the RCMP said it regularly raises reports of abuse on platforms such as Meta, but declined to comment on the specific case.<\/p>\n
Nothing happened. After about a month, Mike Lavery, a former Canadian army officer who the recruiter had worked with years before, called her. He’d lost C$40,000 (about $28,000) after investing in the crypto scam.<\/p>\n
\u201cI thought I was talking to a trusted friend who has a really good reputation,\u201d Lavery told Reuters about the recruiter\u2019s hijacked Facebook account. \u201cBecause of that, my guard was down.\u201d<\/p>\n
The recruiter said she cried when Lavery told her what had happened. \u201cPeople were being harmed because they trust me,\u201d she said. She said she pleaded with friends to continue reporting her rogue account.<\/p>\n
\u201cDozens of people reported it, multiple times each,\u201d she said, estimating that Meta received more than 100 reports. By the time Meta finally took her hacked account offline, at least four other military colleagues had been defrauded, she said.<\/p>\n
Brian Mason, an Edmonton Police investigator, was able to help track C$65,000 of the victims\u2019 stolen funds to Nigeria. But recovering the money would likely be difficult or impossible, he told Reuters, because \u201cthe money was converted into bank accounts in Nigeria that we can\u2019t touch.\u201d<\/p>\n
Meta declined to comment on the air force recruiter\u2019s hacked account or its victims.<\/p>\n
How meta polices fraud<\/p>\n
Internally, Meta refers to scams like this one as \u201corganic,\u201d meaning they don\u2019t involve paid ads on its platforms. Organic scams include fraudulent classified ads placed for free on Facebook Marketplace, hoax dating profiles and charlatans touting phony cures in cancer-treatment groups.<\/p>\n
According to a December 2024 presentation, Meta\u2019s user base is exposed to 22 billion organic scam attempts every day. That\u2019s on top of the 15 billion scam ads presented to users daily.<\/p>\n
Meta polices fraud in a way that fails to capture much of the scam activity on its platforms, some of the documents indicate.<\/p>\n
After police in Singapore gave the company a list of 146 examples of scams targeting that country\u2019s users last fall, Meta staff found that only 23% actually violated the platform\u2019s policies. The other 77% \u201cviolate the spirit of the policy, but not the letter,\u201d a Meta presentation about the police reports notes.<\/p>\n
The deceptive marketing flagged by Singaporean police that Meta didn\u2019t act on included \u201ctoo good to be true\u201d offers of 80% off a designer fashion brand, promotions for fake concert tickets, and job ads posted by entities falsely claiming to be major tech companies.<\/p>\n
Other Meta safety staffers also documented instances in which the company\u2019s rules on scams didn\u2019t appear to cover obviously bad behavior. In April, staffers noted that they\u2019d discovered $250,000 in scam crypto ads from an account claiming to belong to Canada\u2019s prime minister.<\/p>\n
\u201cCurrent policies would not flag this account!\u201d an internal document says. Meta\u2019s Stone said the ads were removed for other reasons. The prime minister\u2019s office didn\u2019t reply to a request for comment.<\/p>\n
<\/p>\n
An excerpt from a 2025 document noting that Meta\u2019s rules on scams had \u201cgaps.\u201d Screenshot via REUTERS<\/p>\n
The \u2018scammiest scammers\u2019 list and \u2018penalty bids\u2019<\/p>\n
Even when advertisers are caught red-handed, the rules can be lenient, the documents indicate. A small advertiser would have to get flagged for promoting financial fraud at least eight times before Meta blocked it, a 2024 document states. Some bigger spenders \u2013 known as \u201cHigh Value Accounts\u201d \u2013 could accrue more than 500 strikes without Meta shutting them down, other documents say.<\/p>\n
Fraudulent ad campaigns can reach massive size: Four removed by Meta earlier this year were responsible for $67 million in monthly advertising revenue, a document reviewed by Reuters shows.<\/p>\n
To draw attention to the company\u2019s perceived failures, an employee earlier this year began issuing reports highlighting that week\u2019s \u201cScammiest Scammer.\u201d The report profiled whichever advertiser had earned the most user complaints about scams in the past week.<\/p>\n
Colleagues praised the initiative. But being name-checked in the report wasn\u2019t always enough for such accounts to get shut down. A check by Reuters of five accounts cited in one Scammiest Scammer report found that two were still live more than six months later, including one that was running ads for unlicensed online casinos. After Reuters flagged those two accounts to Meta, they were taken down.<\/p>\n
Reuters was unable to reach the entities behind the accounts.<\/p>\n
The company last year developed a novel approach to reduce scam advertising and keep its enforcement costs low: It began charging suspected fraudsters more.<\/p>\n
To advertise on Meta\u2019s platforms, a business has to compete in an online auction. Before the bidding, the company\u2019s automated systems calculate the odds that an advertiser is engaged in fraud. Under Meta\u2019s new policy, likely scammers who fall below Meta\u2019s threshold for removal would have to pay more to win an auction.<\/p>\n
Documents from last summer called such \u201cpenalty bids\u201d a centerpiece of Meta\u2019s efforts to reduce scams. Marketers suspected of committing fraud would have to pay Meta more to win ad auctions, thus impacting their profits and reducing the number of users exposed to their ads.<\/p>\n
For Meta, the financial impact was mixed: While the company would sell fewer scam ads, it would make more money from those that it did, offsetting some of the lost revenue.<\/p>\n
Stone said that the goal of the effort was to reduce overall scam advertising by making suspicious advertisers less competitive in Meta\u2019s ad auctions.<\/p>\n
In the months following the implementation of the penalty bid program, Stone said, testing showed both a decline in scam reports and a slight decline in overall ad revenue.<\/p>\n","protected":false},"excerpt":{"rendered":"
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