U.S. Reps. Dan Meuser (R-PA) and Lou Correa (D-CA) introduced a bill that seeks to combat predatory online scam advertisements.
Online platforms have become a primary channel for scams and digital advertising fraud. Some of the scams include fake giveaways, fraudulent animal sales, ads for nonexistent products, government impersonation schemes, romance and health scams, and sophisticated impersonations using AI-cloned voices and stolen images that target consumers and businesses. According to the Federal Trade Commission, fraud losses in 2024 are estimated at $195.9 billion.
The Safeguarding Consumers from Advertising Misconduct (SCAM) Act requires online platforms to take reasonable steps to prevent fraudulent and deceptive ads. It also seeks to strengthen accountability when scams occur, and enhance enforcement of consumer protection laws by the Federal Trade Commission and state authorities.
“As Subcommittee Chairman of Oversight and Investigations, I learned Americans lose nearly $200 billion to financial fraud and scams; half of which originate from social media,” Meuser said. “The SCAM Act is the next step in that investigation. Scammers should not be able to buy their way onto trusted online platforms and prey on vulnerable users. My legislation makes clear that when a platform profits from advertising, it has a responsibility to keep fraudulent ads off its site and protect consumers or face penalties. I’m appreciative of Congressman Correa’s partnership on this important legislation, which will help better protect Americans online.”
Specifically, the SCAM Act would:
- Ban paid scam ads by holding online platforms accountable when they profit from fraudulent or deceptive advertising and fail to stop it;
- Require real advertiser verification and fraud detection, including ID checks, impersonation safeguards, and clear user reporting tools;
- Force fast action on scams, with strict timelines to investigate reports and remove fraudulent ads; and
- Enables enforcement and accountability, empowering the FTC, states, and harmed consumers.
“Every day, millions of hard-working American taxpayers on Main Street are falling victim to social media ad scams that are cheating them out of their hard-earned money,” Correa said. “Social media companies making money from ads have a responsibility to make sure they’re not fraudulent and put consumers first.”
A companion bill was introduced in the Senate by Senators Ruben Gallego (D-AZ) and Bernie Moreno (R-OH).
The SCAM Act has garnered broad support from industry leaders and consumer groups, including the American Bankers Association (ABA).
“ABA commends Reps. Meuser and Correa for introducing the bipartisan SCAM Act and for taking this important step to protect Americans from the growing fraud threat,” Rob Nichols, president and CEO of the American Bankers Association, said. “Each year, Americans lose billions of dollars to scams that originate in ads that appear on social media platforms, and this legislation requires social media companies to take reasonable steps to identify and prevent fraudulent and deceptive ads before they can do any damage.”
It is also supported by the Pennsylvania Bankers Association, the AARP, Consumer Bankers Association, the Bank Policy Institute, and the Pennsylvania Association of Community Bankers.