Meta projected last year that it would earn about 10 per cent of its overall annual revenue – $US16 billion ($24.6 billion) – from running advertising for scams and banned goods, internal company documents show.
Users of Facebook, Instagram and WhatsApp were exposed to fraudulent e-commerce and investment schemes, illegal online casinos and the sale of banned medical products.
The unreported documents reviewed by Reuters show that for at least three years, the social media giant failed to identify and stop an avalanche of ads that were shown to billions of people.
On average, one December 2024 document notes, the company showed its platforms’ users an estimated 15 billion “higher risk” scam advertisements every day.
Meta earns about $US7 billion in annualised revenue from this category of scam ads each year, another late 2024 document says.
According to Meta spokesperson Andy Stone, these documents “present a selective view that distorts Meta’s approach to fraud and scams”.
The company’s internal estimate that it would earn 10.1 per cent of its 2024 revenue from scams and other prohibited ads was “rough and overly inclusive” Mr Stone added without providing an updated figure.
“The assessment was done to validate our planned integrity investments – including in combating frauds and scams – which we did,” he said.
Meta says it is fighting ‘aggressively’ against scams
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Much of the fraud came from marketers acting suspiciously enough to be flagged by Meta’s internal warning systems.
Internal documents from 2024 show Meta failed to stop scam ads being shown to billions of users. (AP: Jeff Chiu, file)
Amid intensifying pressure to do more to combat scams on Meta’s platforms, executives presented chief executive Mark Zuckerberg with a plan in October 2024 for what they called a moderate approach to scam enforcement.
Instead of a rapid crackdown,the company would focus its efforts on countries where it feared near-term regulatory action,according to a document that outlined the strategy.
Rather than voluntarily agreeing to do more to vet advertisers, the unreported documents states, the company’s leadership decided to act only in response to impending regulatory action.
Mr Stone disputed the strategy documents’ assertions that Meta should only act if forced. That isn’t the company’s policy, he said.
Scam ads on Meta target regular people
Meta is trialling facial recognition
Meta’s new experiment is part of the tech giant’s cautious return to the use of facial recognition,having backed away from the technology amid a series of costly lawsuits.
Last October, a recruiter for the Royal Canadian Air Force woke up to find herself locked out of her Facebook account. The woman,who spoke on condition of anonymity as of her military status,had been hacked.
Soon a picture of a fake employment badge with her face on it appeared on her account – along with the text, “I’m super happy to announce I’m crypto currency certified”.
the recruiter said she immediately filed multiple reports with Meta but did not hear a response for weeks.
In that time her account began claiming that she h
Meta awarded ‘Shonky Award’ for Inadequate Action Against Online Scams
Consumer advocacy group CHOICE has awarded Meta, the parent company of Facebook and Instagram, a Shonky Award for 2023, citing the company’s “inadequate action” in combating the proliferation of scams on its platforms. the award highlights ongoing concerns about the volume of fraudulent activity and Meta’s perceived slow response to removing scam accounts and advertisements.
Scams Continue Despite Previous Warnings
A recent examination by Reuters revealed that scam accounts identified in a previous report remained active for over six months. These accounts included those promoting unlicensed online casinos, even after being flagged. Following Reuters’ inquiry, Meta removed the identified accounts. https://www.reuters.com/technology/meta-wins-shonky-award-inadequate-action-scams-2023-11-08/
The issue stems from a surge in fake accounts impersonating celebrities and major brands, exploiting users globally, including in Australia. Despite this increase in online fraud, internal Meta documents from 2022 reportedly show a “lack of investment” in automated scam detection.
Meta’s Prioritization of User Experience Over Scam Prevention
According to the leaked documents, Meta classified scam ads as a “low-severity” problem, primarily viewing them as a negative “user experience” rather than a serious financial threat. This prioritization seemingly led to insufficient resources being allocated to proactively identify and remove fraudulent content.
CHOICE’s Criticism and the Shonky Awards
The Shonky Awards, presented annually by CHOICE, recognize products and services deemed “shonky” – meaning sub-standard, deceptive, or simply poor value. CHOICE spokesperson,Kate Davidson,stated that meta’s inaction allows scammers to “profit from Australians” and that the company has a responsibility to protect its users. https://www.choice.com.au/shonky-awards/meta-shonky-award-2023
Meta’s Response
meta has stated it is investing heavily in technologies and teams to detect and remove scams. A Meta spokesperson told Reuters that the company is “relentless in its efforts to detect and remove scams” and has dedicated teams working on this issue. https://www.reuters.com/technology/meta-wins-shonky-award-inadequate-action-scams-2023-11-08/ However, critics argue that these efforts are insufficient given the scale of the problem.
Key Takeaways
* Meta received a Shonky Award for inadequate action against online scams.
* Scam accounts remained active on Facebook and Instagram for extended periods,even after being reported.
* Internal documents suggest Meta previously under-prioritized scam prevention, viewing it primarily as a user experience issue.
* The surge in fake accounts impersonating celebrities and brands is a growing concern.
Looking Ahead
The Shonky Award serves as a public rebuke of Meta’s handling of online scams. Continued pressure from consumer groups and regulatory bodies will likely be necessary to ensure Meta prioritizes user safety and invests adequately in robust scam detection and prevention measures. Users should remain vigilant and report suspicious activity to Meta and relevant authorities.