Meta Projected $16B From Scam Ads, Internal Documents Reveal

Meta's internal documents show the company projected approximately $16 billion in 2024 revenue would come from ads promoting scams and banned goods, forcing legitimate advertisers to compete against these harmful actors in ad auctions. An estimated 15 billion "higher-risk" scam ads appear daily across Facebook, Instagram, and WhatsApp.

An internal review concluded it's easier to advertise scams on Meta's platforms than on Google, creating significant challenges for genuine advertisers who face potentially higher costs and brand safety concerns. The company imposed revenue guardrails that limited anti-scam enforcement to actions costing no more than 0.15% of total revenue.

The Scope of Meta's Scam Ad Problem

The leaked documents, obtained by Reuters, paint a troubling picture of Meta's advertising ecosystem. Internal estimates suggest that around 10% of Meta's 2024 ad revenue—approximately $16 billion—would come from scam ads and prohibited goods. This represents a massive scale of potentially harmful content reaching users daily.

According to these documents, Meta earns about $7 billion annually just from "higher-risk" scam ads that display clear signs of fraud. The company's enforcement policies appear designed to balance revenue protection with fraud prevention, as Meta only bans advertisers when automated systems predict they are at least 95% certain to be committing fraud.

"Let's be cautious. We have specific revenue guardrails," wrote one manager overseeing anti-scam efforts, highlighting the company's apparent reluctance to take aggressive action against suspected scammers.

Advertisers falling below the 95% certainty threshold face higher ad rates as a penalty but can continue running campaigns. This "penalty bid" system effectively keeps suspected scammers in the auction ecosystem, potentially driving up costs for legitimate advertisers who unknowingly compete against these inflated bids.

Meta spokesperson Andy Stone disputed these findings, calling the internal estimates "rough and overly-inclusive" and claiming they included many legitimate ads. Stone noted that Meta has reduced user reports of scam ads globally by 58% over the past 18 months and removed more than 134 million pieces of scam ad content in 2025.

These issues highlight the growing importance of protecting small businesses from social media security threats, as fraudulent advertising creates additional vulnerabilities in an already challenging digital landscape.

Impact on Advertisers and Consumers

The revelations have significant implications for both advertisers and consumers using Meta's platforms. For advertisers, the findings suggest they may be paying more than necessary for ad placements due to competition with suspected scammers paying penalty rates.

Small advertisers face particular challenges within this system. According to the documents, small advertisers must be flagged eight times for financial fraud before getting banned. Even more concerning, some large "High Value Accounts" reportedly accrued more than 500 fraud strikes without being shut down by Meta.

The documents also revealed that Meta restricted anti-scam enforcement in early 2024 to actions costing no more than approximately $135 million—just 0.15% of total revenue. This suggests financial considerations may have limited the company's willingness to aggressively combat fraud.

For consumers, the risk is substantial. A Meta presentation estimated the company's platforms were involved in one-third of all successful scams in the United States. The UK Payment Systems Regulator provided even more alarming statistics, noting that Meta's products were linked to 54% of payment-related scam incidents in 2023.

These figures align with ongoing regulatory scrutiny, as the documents indicate the SEC is investigating Meta for running ads promoting financial scams.

Regulatory Oversight and Compliance Concerns

The scale of Meta's scam ad problem raises important questions about regulatory oversight in digital advertising. As businesses invest more heavily in social media advertising strategies and platforms, the integrity of these ecosystems becomes increasingly critical to marketing success.

According to a Federal Trade Commission report, digital advertising fraud costs businesses billions annually, with social media platforms being particularly vulnerable to sophisticated scam operations. This reinforces the need for both platform accountability and advertiser vigilance.

Meta's Response and Future Plans

Meta has contested many aspects of the leaked documents while acknowledging efforts to improve. Stone clarified that the 0.15% figure mentioned in strategy documents was based on a revenue forecast and isn't a strict enforcement cutoff.

"The idea Meta should only take action when regulators demand it isn't how the company operates," Stone stated. He explained that testing of the penalty bid program actually revealed a decrease in scam reports along with only a small dip in total ad revenue.

Meta has outlined plans to address the issue over time. Strategy documents indicate the company aims to lower the share of revenue from scams, illegal gambling, and prohibited goods from an estimated 10.1% in 2024 to 7.3% by the end of 2025. Further targets include reaching 6% by the end of 2026 and 5.8% in 2027.

Enhanced Security Measures and Verification Protocols

In response to mounting criticism, Meta appears to be developing more robust verification protocols for advertisers. These efforts align with broader industry trends toward establishing comprehensive security incident response frameworks that can distinguish between routine security events and true security incidents requiring immediate action.

Implementing these enhanced verification measures could significantly reduce the prevalence of scam ads while simultaneously improving platform trust for both advertisers and users. However, the timeline for full implementation remains unclear based on the leaked documents.

How Advertisers Can Protect Themselves

With these revelations, advertisers should consider several protective measures:

1. Monitor campaign performance metrics closely for unusual cost increases or performance fluctuations.

2. Implement robust brand safety measures, including keyword exclusions and placement controls.

3. Consider diversifying ad spend across multiple platforms to mitigate risks associated with any single platform.

The findings also highlight the importance of platforms like Meta improving transparency around auction dynamics and enforcement policies. Advertisers deserve clarity on whether they're competing against legitimate businesses or entities that have been flagged but allowed to continue operating with penalty bids.

The Bigger Picture for Digital Advertising

This situation reflects broader challenges in the digital advertising ecosystem, reminiscent of the "fake news" scandals that plagued platforms during the 2016 election cycle. As Meta's leaked documents show, the tension between platform revenue goals and content integrity remains a significant issue.

The revelations come at a time when advertisers are increasingly concerned about brand safety and efficient ad spend. In a challenging economic environment, knowing that approximately 10% of Meta's ad revenue may come from questionable sources raises important questions about the overall health of the digital advertising marketplace.

For businesses navigating this landscape, these findings serve as a reminder to approach platform advertising with appropriate skepticism and due diligence. Maintaining awareness of potential hidden costs and risks within advertising ecosystems is essential for protecting both brand reputation and marketing budgets.

As Meta works toward its stated goals of reducing problematic ad content, advertisers should hold the company accountable through industry associations and direct feedback, while also implementing their own protective measures to ensure advertising dollars are spent effectively and responsibly.