How scams, fake ads helped Meta earn over ₹1.3 lakh crore

Scam ads are now one of the biggest threats on social media, especially as fraudsters use AI-generated faces.

A new Reuters investigation claims that Meta, the parent company of Facebook, Instagram and WhatsApp, may have earned over $16 billion ( ₹1.33 lakh crore) last year from fraudulent ads running across its platforms. These ads reportedly promoted everything from illegal gambling and fake investment schemes to banned medical products.

The Reuters report adds that Meta allegedly failed for at least three years to adequately protect users. (AP)

By Ayushmann Chawla

Ayushmann Chawla is the Deputy Chief Content Producer at Hindustan Times. A seasoned tech journalist with years of experience working for some of the industry’s leading media organizations, his articles can also be read on Live Mint. His passion extends beyond journalism—he’s a dedicated automobile enthusiast, always ready to explore the latest in car technology and design. A self-confessed gadget lover, Ayushmann finds joy in testing new devices and sharing his findings with his audience. Instagram: ayushmannchawla

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According to internal documents reviewed by Reuters, Meta projected that 10% of its total annual revenue in 2024 would come from such scammy or misleading advertisements, despite clear risks to users.

Meta’s system: Not blocking scams, just charging more

The report alleges that Meta has an internal algorithm that scores how likely an advertiser is to be running a scam. But the catch is this:

-Meta only blocks an advertiser if it is 95% certain the ad is fraudulent.

-If the fraud probability is lower than that, even around 80–90%, Meta simply charges the advertiser higher fees to discourage them.

But instead of backing off, many fraudulent advertisers continue paying, which ends up boosting Meta’s revenue.

This means that the platform can profit from advertisers it strongly suspects of wrongdoing, without actually shutting them down.

Fake ads flourished for three years

The Reuters report adds that Meta allegedly failed for at least three years to adequately protect users from: Illegal online gambling promotions, fake or risky investment ads, banned medical products and fraudulent services designed to trick vulnerable or less tech-savvy users.

These ads often mimic legitimate brands or government agencies to lure victims, especially elderly or financially insecure users.

Meta responds: ‘Selective and misleading’

Asked to comment, Meta spokesperson Andy Stone said the documents present a “selective view” that distorts Meta’s efforts to combat fraud.

He also pointed to improvements:

-58% drop in user reports of scam ads over the last year and a half

-134 million scam ads removed from Meta apps during the same period

Even so, these numbers also highlight just how widespread the issue remains.

Why this matters

Scam ads are now one of the biggest threats on social media, especially as fraudsters use AI-generated faces, fake celebrity endorsements, and cloned voices to deceive users.

If platforms can quietly profit from suspicious advertisers, instead of removing them outright, the incentive to aggressively fight fraud becomes weaker.

For billions of users, the findings raise new questions: is your feed safe, or is it being shaped by ads Meta suspects are scams, but still allows because they pay well?