<https://arstechnica.com/tech-policy/2025/11/bombshell-report-exposes-how-meta-relied-on-scam-ad-profits-to-fund-ai/>
“High risk” versus “high value”
Meta goosed its revenue by targeting users likely to click on scam ads,
docs show.
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.
In a lengthy report
<https://www.reuters.com/investigations/meta-is-earning-fortune-deluge-fraudulent-ads-documents-show-2025-11-06/>,
Reuters exposed five years of Meta practices and failures that allowed
scammers to take advantage of users of Facebook, Instagram, and WhatsApp.
Documents showed that internally, Meta was hesitant to abruptly remove
accounts, even those considered some of the “scammiest scammers,” out of
concern that a drop in revenue could diminish resources needed for
artificial intelligence growth.
Instead of promptly removing bad actors, Meta allowed “high value
accounts” to “accrue more than 500 strikes without Meta shutting them
down,” Reuters reported. The more strikes a bad actor accrued, the more
Meta could charge to run ads, as Meta’s documents showed the company
“penalized” scammers by charging higher ad rates. Meanwhile, Meta
acknowledged in documents that its systems helped scammers target users
most likely to click on their ads.
“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,” Reuters reported.
Internally, Meta estimates that users across its apps in total encounter
15 billion “high risk” scam ads a day. That’s on top of 22 billion
organic scam attempts that Meta users are exposed to daily, a 2024
document showed. Last year, the company projected that about $16
billion, which represents about 10 percent of its revenue, would come
from scam ads.
“High risk” scam ads strive to sell users on fake products or investment
schemes, Reuters noted. Some common scams in this category that mislead
users include selling banned medical products, or promoting sketchy
entities, like linking to illegal online casinos. However, Meta is most
concerned about “imposter” ads, which impersonate celebrities or big
brands that Meta fears may halt advertising or engagement on its apps if
such scams aren’t quickly stopped.
“Hey it’s me,” one scam advertisement using Elon Musk’s photo read. “I
have a gift for you text me.” Another using Donald Trump’s photo claimed
the US president was offering $710 to every American as “tariff relief.”
Perhaps most depressingly, a third posed as a real law firm, offering
advice on how to avoid falling victim to online scams.
Meta removed these particular ads after Reuters flagged them, but in
2024, Meta earned about $7 billion from “high risk” ads like these
alone, Reuters reported.
Sandeep Abraham, a former Meta safety investigator who now runs
consultancy firm Risky Business Solutions as a fraud examiner, told
Reuters that regulators should intervene.
“If regulators wouldn’t tolerate banks profiting from fraud, they
shouldn’t tolerate it in tech,” Abraham said.
Meta won’t disclose how much it made off scam ads
Meta spokesperson Andy Stone told Reuters that its collection of
documents—which were created between 2021 and 2025 by Meta’s finance,
lobbying, engineering, and safety divisions—“present a selective view
that distorts Meta’s approach to fraud and scams.”
Stone claimed that Meta’s estimate that it would earn 10 percent of its
2024 revenue from scam ads was “rough and overly-inclusive.” He
suggested the actual amount Meta earned was much lower but declined to
specify the true amount. He also said that Meta’s most recent investor
disclosures note that scam ads “adversely affect” Meta’s revenue.
“We aggressively fight fraud and scams because people on our platforms
don’t want this content, legitimate advertisers don’t want it, and we
don’t want it either,” Stone said.
Despite those efforts, this spring, Meta’s safety team “estimated that
the company’s platforms were involved in a third of all successful scams
in the US,” Reuters reported. In other internal documents around the
same time, Meta staff concluded that “it is easier to advertise scams on
Meta platforms than Google,” acknowledging that Meta’s rivals were
better at “weeding out fraud.”
As Meta tells it, though seemingly dismal, these documents came amid
vast improvements in its fraud protections. Stone told Reuters that
“over the past 18 months, we have reduced user reports of scam ads
globally by 58 percent and, so far in 2025, we’ve removed more than 134
million pieces of scam ad content,” Stone said.
According to Reuters, the problem may be the pace Meta sets in combating
scammers. In 2023, Meta laid off “everyone who worked on the team
handling advertiser concerns about brand-rights issues,” then ordered
safety staffers to limit use of computing resources to devote more
resources to virtual reality and AI. A 2024 document showed Meta
recommended a “moderate” approach to enforcement, plotting to reduce
revenue “attributable to scams, illegal gambling and prohibited goods”
by 1–3 percentage points each year since 2024, supposedly slashing it in
half by 2027. More recently, a 2025 document showed Meta continues to
weigh how “abrupt reductions of scam advertising revenue could affect
its business projections.”
Eventually, Meta “substantially expanded” its teams that track scam ads,
Stone told Reuters. But Meta also took steps to ensure they didn’t take
too hard a hit while needing vast resources—$72 billion—to invest in AI,
Reuters reported.
For example, in February, Meta told “the team responsible for vetting
questionable advertisers” that they weren’t “allowed to take actions
that could cost Meta more than 0.15 percent of the company’s total
revenue,” Reuters reported. That’s any scam account worth about $135
million, Reuters noted. Stone pushed back, saying that the team was
never given “a hard limit” on what the manager described as “specific
revenue guardrails.”
“Let’s be cautious,” the team’s manager wrote, warning that Meta didn’t
want to lose revenue by blocking “benign” ads mistakenly swept up in
enforcement.
Meta should donate scam ad profits, ex-exec says
Documents showed that Meta prioritized taking action when it risked
regulatory fines, although revenue from scam ads was worth roughly three
times the highest fines it could face. Possibly, Meta most feared that
officials would require disgorgement of ill-gotten gains, rather than fines.
Meta appeared to be less likely to ramp up enforcement from police
requests. Documents showed that police in Singapore flagged “146
examples of scams targeting that country’s users last fall,” Reuters
reported. Only 23 percent violated Meta’s policies, while the rest only
“violate the spirit of the policy, but not the letter,” a Meta
presentation said.
Scams that Meta failed to flag offered promotions like crypto scams,
fake concert tickets, or deals “too good to be true,” like 80 percent
off a desirable item from a high-fashion brand. Meta also looked past
fake job ads that claimed to be hiring for Big Tech companies.
Rob Leathern previously led Meta’s business integrity unit that worked
to prevent scam ads but left in 2020. He told Wired
<https://www.wired.com/story/scam-ads-are-flooding-social-media-these-former-meta-staffers-have-a-plan/>
that it’s hard to “know how bad it’s gotten or what the current state
is” since Meta and other social media platforms don’t provide outside
researchers access to large random samples of ads.
With such access, researchers like Leathern and Rob Goldman, Meta’s
former vice president of ads, could provide “scorecards” showing how
well different platforms work to combat scams. Together, Leathern and
Goldman launched a nonprofit called CollectiveMetrics.org
<https://www.collectivemetrics.org/> in hopes of “bringing more
transparency to digital advertising in order to fight deceptive ads,”
Wired reported.
“I want there to be more transparency. I want third parties,
researchers, academics, nonprofits, whoever, to be able to actually
assess how good of a job these platforms are doing at stopping scams and
fraud,” Leathern told Wired. “We’d like to move to actual measurement of
the problem and help foster an understanding.”
Another meaningful step that Leathern thinks companies like Meta should
take to protect users would be to notify users when Meta discovers that
they clicked on a scam ad—rather than targeting them with more scam ads,
as Reuters suggested was Meta’s practice.
“These scammers aren’t getting people’s money on day one, typically. So
there’s a window to take action,” he said, recommending that platforms
donate ill-gotten gains from running scam ads to “fund nonprofits to
educate people about how to recognize these kinds of scams or problems.”
“There’s lots that could be done with funds that come from these bad
guys,” Leathern said.
Ashley is a senior policy reporter for Ars Technica, dedicated to
tracking social impacts of emerging policies and new technologies. She
is a Chicago-based journalist with 20 years of experience.
