Bipartisan bill to tackle social media scam ads introduced in US Senate

A bipartisan group of U.S. senators introduced legislation this week aimed at holding social media companies accountable for the spread of fraudulent and deceptive advertisements that have proliferated across major platforms and cost consumers substantial sums of money.

The Safeguarding Consumers from Advertising Misconduct Act (SCAM Act) was introduced by Arizona Democratic Sen. Ruben Gallego and Ohio Republican Sen. Bernie Moreno as lawmakers seek to tighten oversight and establish clear legal obligations for online platforms to prevent scam advertising.

“Scammers are using social media to swindle Americans out of their hard-earned savings, and right now, those platforms face almost no consequences for letting it happen,” said Gallego. “If a company is making money from running ads on their site, it has a responsibility to make sure those ads aren’t fraudulent. This bipartisan bill will hold social media companies accountable and protect consumers’ money online.”

“It is critical that we protect American consumers from deceptive ads and shameless fraudsters who make millions taking advantage of legal loopholes,” Moreno added. “We can’t sit by while social media companies have business models that knowingly enable scams that target the American people.”

The two lawmakers’ bill would require social media companies and other online services that sell advertising to take “reasonable steps” to verify the identities of advertisers before their ads appear. Verification could include government-issued identification or documentation proving a business’s legal existence.

Platforms that fail to address fraudulent ads could face enforcement actions by the Federal Trade Commission, and state attorneys general would be empowered to bring civil actions against non-compliant companies under federal laws against unfair or deceptive business practices.

Gallego and Moreno stressed that existing efforts by platforms to police scam ads through automated detection and optional verification have been inadequate.

The two senators said social media has become a major conduit for a wide range of scam advertising, including fake giveaways, romance scams, government impersonation schemes and misleading health or investment offers, some of which exploit AI techniques to magnify harm.

Supporters from consumer advocacy groups and industry associations, including the American Bankers Association and AARP, argue that holding platforms legally responsible for preventing scam ads will help protect older Americans and other vulnerable populations who are frequently targeted by fraudsters.

“Online scam ads have become increasingly sophisticated and pervasive, with criminals exploiting advertising on major social media platforms to target older adults,” said Bill Sweeney, senior vice president of government affairs at AARP.

“By establishing strong protections and accountability measures, the SCAM Act will help safeguard older Americans from fraud and reduce the spread of harmful scam ads,” Sweeney added.

Meta Platforms, the parent company of Facebook and Instagram, has disputed estimates implying a large share of its revenue comes from scam-related advertising and said it deploys a combination of automated tools and ad review processes to fight fraud.

The introduction of the SCAM Act coincides with a rising global regulatory focus on how social media companies prevent scams and impersonation. In Singapore, authorities under the Online Criminal Harms Act have issued directives to Meta requiring the company to significantly expand the use of facial recognition technology and enhance other anti-impersonation measures on Facebook and Instagram.

Those measures are aimed at reducing scam advertisements and accounts that impersonate government officials and individuals at high risk of impersonation, and Meta faces fines of up to US$740,000 plus daily penalties if it fails to meet phased implementation deadlines.

Singapore’s actions reflect growing concerns in the Asia-Pacific region about the use of advanced technologies by fraudsters and increasing expectations that platforms adopt stronger anti-scam defenses, including biometric-based protections.

Regulators in other countries have similarly urged more robust responses to deceptive advertising and impersonation on social media.

The SCAM Act has been referred to the Senate Committee on the Judiciary for consideration. Its backers will seek additional support from colleagues in both parties before attempting to advance it to a full Senate vote.

Advocates say the bill could represent a significant shift in how online platforms are held accountable for preventing consumer harms that begin with deceptive ads, aligning U.S. policy with broader international regulatory trends focused on platform responsibility and consumer protection.

Article Topics

AI fraud  |  fraud prevention  |  identity verification  |  legislation  |  marketing  |  Meta  |  social media  |  U.S. Government