Meta reportedly makes 10% of its revenue from fraudulent ads and scams.

Damning PakGazette report reveals Meta’s unwillingness to tackle scams
10% of Meta’s revenue apparently comes from fraudulent ads and illegal content
Meta considered harm reduction under threat from regulators

The number of scam ads and less than legitimate product listings on social media platforms certainly appears to have increased dramatically in recent years, but a new report claims that the websites themselves could be partly to blame.

Internal projections seen by PakGazette reveals Meta, the company behind Facebook and Instagram, apparently makes 10% of its projected annual revenue from advertising scams and banned products, amounting to around $16 billion.

The documents also suggest that the social media conglomerate “failed to identify and stop an avalanche of ads,” leaving billions of Instagram, Facebook and WhatsApp users at risk due to the fraudulent ecosystem.

The so-called repression

Over the years, Meta has publicized efforts to launch a “major crackdown” on organized crime, pig slaughter scams, and social engineering attacks, going so far as to remove up to 2 million accounts from the Facebook platform.

goal said TechRadar Pro “aggressively fights fraud” on its platforms, “because people on our platforms don’t want this content, legitimate advertisers don’t want it, and we don’t want it either.”

“Fraudsters are persistent criminals whose efforts, often fueled by ruthless cross-border criminal networks operating on a global scale, continue to grow in sophistication and complexity. As fraudulent activity becomes more persistent and sophisticated, so do our efforts. Unfortunately, the leaked documents present a selective view that distorts Meta’s approach to fraud and scams by focusing on our efforts to assess the scale of the challenge, not on the full range of actions we have taken to address the problem.”

But these new documents revealed that even marketers who were suspicious enough to be flagged by Meta’s internal warning systems are often allowed to continue, and are only banned once the fraud prediction reaches 95%.

That means that if Meta is 94% sure that an ad is scamming its users, it can continue. Surprisingly, Meta actually does further money from ads that it considers scams, charging a higher advertising rate as a penalty.

So is there really a big incentive for Meta to remove scammers who take advantage of users? Not even Meta thinks so.

In the documents, Meta allegedly weighs the revenue it earns from fraudulent ads and the regulatory fines it believes are inevitable if these high-risk fraudulent ads are not mitigated. Note here that Meta is No suggesting that it would voluntarily do more to vet advertisers to protect consumers, but would act under the threat of imminent regulatory sanctions.

Thousands of scams have been detected on Meta platforms with varying degrees of success and severity, but criminals are undoubtedly making a lot of money from these tricks (as is Meta). In the UK, Meta products were involved in up to 54% of all payments-related scam losses in 2023, the report reveals, outlining how endemic this problem is, making it even more abhorrent that Meta chooses to continue profiting from it.