New SCAM Act Targets False Advertising on Social Media

A new legislative measure aims to address the growing problem of deceptive advertising on social media platforms, raising hopes that stricter regulations could better protect consumers from misleading promotions and false claims circulating online.

A Bipartisan Push Against Deceptive Online Advertising

In the United States, a new legislative effort has emerged to tackle the persistent issue of fraudulent advertising on major social media platforms. This time, the push comes from across the aisle: Senators Ruben Gallego (D-AZ) and Bernie Moreno (R-OH) have joined forces to introduce the Safeguarding Consumers from Advertising Misconduct Act—better known as the SCAM Act. Their aim is simple in principle but challenging in practice: require digital giants to take real responsibility for the ads they publish.

The Mechanics of the SCAM Act

At the heart of this proposed legislation is a mandate that platforms implement “reasonable measures” to prevent the spread of false or illegal ads—those that frequently lead to dubious profits and harm unsuspecting consumers. Should platforms fail to meet these requirements, they would not just risk public backlash; both the Federal Trade Commission (FTC) and state attorneys general would be empowered to pursue civil actions against them. The move signals a significant shift in expectations around accountability for companies like Meta, which have historically enjoyed wide leeway.

The Financial Scale: Billions at Stake

Several factors explain this bipartisan momentum:

• Meta’s ad revenues are under scrutiny after a November 2025 Reuters investigation revealed up to 10% of its 2024 revenue—potentially $16 billion—came from problematic ads.
• The scams range widely, from fraudulent e-commerce offers and risky investments to illegal gambling and unapproved medical products.
• Dismissing bad actors proved difficult: some advertisers were only removed after being reported hundreds of times, especially if they were major spenders. Internal policies reportedly discouraged taking action if it threatened more than 0.15% of total revenue—a figure highlighting the industry’s lenient approach thus far.

The Human Cost: American Consumers Under Threat

The consequences have not gone unnoticed by authorities. According to FTC estimates, fraud cost Americans nearly $19 billion in 2024 alone—with older adults shouldering more than $81 billion in losses over time. For lawmakers such as Gallego, there’s little ambiguity: platforms profiting from advertising must ensure those ads are legitimate. Moreno echoes this sentiment, questioning how any business model can justify enabling scams that exploit citizens.

As debates about digital regulation intensify, this bill represents a concrete step toward balancing technological innovation with robust consumer protection—a balance many argue is long overdue.