The Wall Street Journal reports an "epidemic" of scams targeting Facebook and Instagram users. Meta knows about it but is "reluctant to add impediments for ad-buying clients" driving a 22% increase in its ad business. Even when they are identified, "the company will allow advertisers to accrue between eight and 32 automated "strikes" for financial fraud before it bans their accounts."
Meta Platforms, the parent company of Facebook and Instagram, is increasingly a cornerstone of the internet fraud economy, according to regulators, banks and internal documents reviewed by The Wall Street Journal.
The company accounted for nearly half of all reported scams on Zelle for JPMorgan Chase between the summers of 2023 and 2024, according to a person familiar with the service. The peer-to-peer payment platform is owned by several banking giants, including JPMorgan, the country's biggest bank, and Wells Fargo. Other banks that offer Zelle have experienced similarly high fraud claims originating on Meta, according to people familiar with the matter.
British and Australian regulators have found similar levels of fraud originating on Meta's platforms. An internal analysis from 2022 described in company documents likewise found that 70% of newly active advertisers on the platform are promoting scams, illicit goods or "low quality" products.
A couple of years ago I complained about all the obvious scam listings on Facebook Marketplace, which list high-ticket items at a formulaic low price and "buy" links to hacked domains. These scams are programmatically blatant: lists of URLs, unobfuscated spam keywords and phrases, all cut and paste across numerous posts. They never took down anything reported to them. It's not suprising to learn that even paid advertising there is an unmoderated wasteland of fraud. As found by one wholesaler constantly impersonated there:
In Guzman's case, a search of Meta's ad library this spring showed that more than 4,400 different ads listing the address of his business have run on Meta's platforms over the last year. Guzman's actual business was responsible for 15 of them.
The basic problem is that there's no risk in it for Facebook: "The alleged underenforcement of Meta's monitoring policies cannot give rise to liability," as the company argued in Federal court last year.
