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Title: Bombshell Report Exposes How Meta Relied On Scam Ad Profits To Fund AI

Link: https://tech.slashdot.org/story/25/11/08/0653...

"Internal documents have revealed that Meta has projected it earns billions
from ignoring scam ads that its platforms then targeted to users most likely
to click on them," writes Ars Technica, citing a lengthy report from Reuters.
Reuters reports that Meta "for at least three years failed to identify and
stop an avalanche of ads that exposed Facebook, Instagram and WhatsApp's
billions of users to fraudulent e-commerce and investment schemes, illegal
online casinos, and the sale of banned medical products..." On average, one
December 2024 document notes, the company shows its platforms' users an
estimated 15 billion "higher risk" scam advertisements - those that show
clear signs of being fraudulent - every day. Meta earns about $7 billion in
annualized revenue from this category of scam ads each year, another late
2024 document states. Much of the fraud came from marketers acting
suspiciously enough to be flagged by Meta's 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 - but still believes the advertiser is a likely
scammer - Meta charges higher ad rates as a penalty, according to the
documents. The idea is to dissuade suspect advertisers from placing ads. The
documents further note that users who click on scam ads are likely to see
more of them because of Meta's ad-personalization system, which tries to
deliver ads based on a user's interests... The documents indicate that Meta's
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's 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... 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. But those fines would be much smaller than Meta's 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 "present higher
legal risk," 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 "the cost of any regulatory settlement
involving scam ads...." 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's computing resources. They were instructed merely
to "keep the lights on...." 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. Meta's 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. 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 - known as "High Value Accounts" - could accrue more than 500
strikes without Meta shutting them down, other documents say. Thanks to long-
time Slashdot reader schwit1 for sharing the article.

Read more of this story at Slashdot.

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