Full Breakdown
U.S. Senators Introduce SCAM Act to Combat Fraudulent Social Media Advertising
2/4/2026, 8:18:20 PM
Legislative Overview: The SCAM Act
On February 4, 2026, U.S. Senators Ruben Gallego (Democrat, Arizona) and Bernie Moreno (Republican, Ohio) introduced the Safeguarding Consumers from Advertising Misconduct Act, commonly referred to as the SCAM Act. This bipartisan legislation aims to require social media platforms to verify their advertisers and take proactive measures against fraudulent advertising. The bill mandates that platforms implement "reasonable steps" to combat scams or face legal repercussions from the Federal Trade Commission (FTC) and state attorneys general.
The SCAM Act was prompted by revelations that Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, anticipated that approximately 10% of its 2024 revenue—around $16 billion—would stem from ads promoting scams and other illicit products. This information emerged from internal documents cited in a press release accompanying the bill's introduction.
Key Provisions of the SCAM Act
The proposed legislation requires social media platforms to verify the identity of advertisers through government-issued identification and to ensure the legal existence of businesses. Additionally, platforms must promptly address reports of scams from users or government entities. Non-compliance with these requirements would be treated as a violation of the FTC's prohibition against unfair or deceptive business practices, allowing state attorneys general to initiate civil actions for alleged violations.
Support and Endorsements
The SCAM Act has garnered support from various organizations, including the American Bankers Association and consumer advocacy groups such as AARP. These organizations emphasize the need for stronger protections, particularly for older Americans who are often targeted by scams.
Criticism and Concerns
Despite the bill's intentions, critics have raised concerns regarding its effectiveness. Meta's spokesman, Andy Stone, described advertiser verification as "not a silver bullet," suggesting that it may not fully address the issue of fraudulent ads. Furthermore, Sandeep Abraham, a former Meta fraud investigator, warned that the company might be focusing on easily identifiable issues to appease regulators rather than addressing deeper systemic problems.
The SCAM Act's language regarding "reasonable steps" is also seen as potentially vague, which could lead to disputes over the obligations of social media platforms and the timeliness of their responses to reported scams. Critics argue that even with identity verification, scammers could exploit stolen identities or create shell companies, merely shifting the fraud rather than eliminating it.
Official Statements
Senator Moreno stated, “We can’t sit by while social media companies have business models that knowingly enable scams that target the American people.” Senator Gallego added, “If a company is making money from running ads on their site, it has a responsibility to make sure those ads aren't fraudulent.”
What's Next
As the SCAM Act progresses through Congress, it will likely face significant debate regarding its provisions and implications for social media platforms. Lawmakers aim to shift the current voluntary compliance model into a mandatory framework with enforceable obligations, reflecting a growing urgency to address the proliferation of scams in digital advertising.
