Online fraud: Meta networks make money from spam and illegal sales

In 2024, 10% of the total revenue of Meta, owner of the social networks Instagram, Facebook and WhatsApp, was generated by advertisements for fraudulent schemes (called spam) or the sale of prohibited products.

The data, revealed this Thursday (6) is recorded in documents to which the Reuters news agency had access.

Throughout the year, Meta earned around US$16 billion from this type of advertising. Of this, US$7 billion comes from what the company itself classifies as “higher risk scam ads”, which, according to Reuters, means “those that show clear signs of being fraudulent”.

On average, 15 billion ads with a high risk of scam are displayed to Meta social media users every day.

Documents obtained by Reuters also show that for at least three years the technology giant failed to identify and contain advertisements on Facebook, Instagram and Whatsapp related to fraudulent e-commerce and investment schemes, illegal online casinos and the sale of banned medical products.

Target measures to deal with fraud

The same documents accessed by Reuters explain that Meta only deletes ads if its automated systems identify a risk of 95% or more that it is a scam.

When the system assigns less certainty, but still suspects a scam, another measure is applied: higher rates are charged to advertisers. The idea, according to the platform, is to dissuade scammers from running advertisements.

Furthermore, when a person clicks on a scam ad, they tend to receive others of the same type. This happens because the networks’ algorithm understands that the user likes that type of content.

Lack of supervision

For an expert interviewed by Reuters, the fact that Meta accepts revenue from fraud highlights the problem of the lack of regulatory oversight of advertising.

Sandeep Abraham is a former security investigator at Meta and currently runs a consultancy called Risky Business Solutions. He said:

“If regulators haven’t tolerated banks profiting from fraud, they shouldn’t tolerate it in the technology sector either,” he told Reuters.

Other side

Meta sent a statement to Reuters regarding the information. Andy Stone, a company spokesman, said the documents “present a selective view that distorts Meta’s approach to fraud and scams.”

He said the estimate of 10% of revenue coming from fraud was “crude and overly broad” and that the company later concluded the real number was lower. The representative, however, did not provide any updated values.

“We actively fight fraud and scams because people on our platforms don’t want this type of content, legitimate advertisers don’t want it, and we don’t want it either.”

He concluded by stating that over the past 18 months, user reports of fraudulent ads have reduced by 58% and that more than 134 million pieces of fraudulent advertising content have been removed this year to date.