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Reuters put out a special report this month on Meta — the parent company of Facebook, Instagram, and WhatsApp — after getting access to a tranche of internal documents to do with revenue from scam ads. The first major news, as far as I’m concerned, is the revelation that Meta actually bothers reviewing their systems to check on ethically dubious activity. Color me surprised! The next bombshell is that Meta has a fairly good handle (social media pun!) on identifying likely scam, but instead of banning those ads, Meta charges them higher rates, calling that a sufficient deterrent. And then the jaw-dropper is that the income from those scam ads makes up 10% of Meta’s overall earnings in a year, which translates to $16 billion. I’d say that’s not a deterrent for Meta to deal with scammers properly. And topping this whole mess off is that Meta is particularly anxious to keep advertising revenue high right now as they invest the fortune it takes to train up AI to be occasionally accurate. Some lowlights:

By the numbers: Much of the fraud [15 billion scam ads a day] came from marketers acting suspiciously enough to be flagged by Meta’s internal warning systems. But the company only bans advertisers if its automated systems predict the marketers are at least 95% certain to be committing fraud, the documents show. If the company is less certain — but still believes the advertiser is a likely scammer — Meta charges higher ad rates as a penalty, according to the documents. The idea is to dissuade suspect advertisers from placing ads.

Meta is ‘a pillar of the global fraud economy’: At the same time, the documents indicate that Meta’s own research suggests its products have become a pillar of the global fraud economy. A May 2025 presentation by its safety staff estimated that the company’s platforms were involved in a third of all successful scams in the U.S. Meta also acknowledged in other internal documents that some of its main competitors were doing a better job at weeding out fraud on their platforms. “It is easier to advertise scams on Meta platforms than Google,” concluded an internal Meta review in April 2025 of online communities where fraudsters discuss their trade.

Scam ads are funding their AI dreams: The regulatory pressure on Meta to do more to fight scams occurs as the company, in a race with competitors, is pouring money into artificial intelligence and plans as much as $72 billion this year in overall capital expenditures. While acknowledging the spending is “a massive amount of capital,” chief executive Mark Zuckerberg has sought to reassure investors that Meta’s advertising business can bankroll it. “We have the capital from our business to do this,” he said in July, when announcing that to support AI, Meta was constructing a data center in Ohio that will be the size of New York City’s Central Park.

Paying fines costs them less than eliminating the scam income: Meta has internally acknowledged that regulatory fines for scam ads are certain, and anticipates penalties of up to $1 billion, according to one internal document. But those fines would be much smaller than Meta’s revenue from scam ads, a separate document from November 2024 states. Every six months, Meta earns $3.5 billion from just the portion of scam ads that “present higher legal risk,” the document says, such as those falsely claiming to represent a consumer brand or public figure or demonstrating other signs of deceit. That figure almost certainly exceeds “the cost of any regulatory settlement involving scam ads.”

But they ARE restricting how much scam revenue can be cut! In the first half of 2025, a February document states, the team responsible for vetting questionable advertisers wasn’t allowed to take actions that could cost Meta more than 0.15% of the company’s total revenue. That works out to about $135 million out of the $90 billion Meta generated in the first half of 2025.

[From Reuters]

I don’t know about you, but my circuits are totally fried from the relentless onslaught of demoralizing tech news this week. And what’s the connecting thread among them? AI! AI might not be the central issue in this reporting, but it’s clearly the impetus for why Meta is reluctant to be more aggressive in their anti-scam efforts. I couldn’t bear to excerpt more, but the full Reuters article is much, much longer, filled with devastating accounts of how users, police, and even militaries from around the world report scam instances to Meta… and the company just does nothing. Well, that’s not entirely true; this year a Meta employee started flagging advertisers earning the most complaints in a weekly report called the “Scammiest Scammer.” Even then, Meta is slow to respond. They claim they’re working to reduce scam ad revenue to 7.3% by the end of this year, 6% next year, and 5.8% by the end of 2027. If you can believe they still won’t need those billions to feed the bottomless pit of AI in the years to come, which I don’t.

An example of scam ads/accounts:

Note by CB: Here’s a video about AI ads on Facebook selling cheap products as artisanal.