Internal documents reviewed by Reuters suggest that Meta Platforms has quietly turned scam advertising on Facebook and Instagram into a multibillion dollar business line, even as the company publicly touts its safety tools and anti-fraud investments. The records indicate that Meta has treated a significant slice of deceptive promotions as “high risk” but still lucrative, raising sharp questions about whether the platform’s incentives are aligned with protecting users or maximizing ad revenue.
As regulators, courts, advertisers, and grieving families scrutinize how these scams spread, a picture is emerging of a company that profits from fraud at scale while insisting it is doing everything it can to stop it. I see a widening gap between Meta’s polished assurances and the hard numbers in those internal assessments, and that gap is where the legal, financial, and human fallout is now gathering.
Inside the Reuters revelations: how scam ads became a revenue stream
The core allegation is stark: Meta Platforms, Inc has known that a large share of its ad income comes from schemes that trick users, yet it has continued to bank the money. According to Internal documents reviewed by Reuters, the company identified “high risk” scam campaigns on Facebook and Instagram that generated billions of dollars in annual revenue, treating them as a measurable and forecastable part of its business rather than an aberration to be stamped out. One legal analysis of those materials notes that this internal recognition of “high risk” fraud could open the door to large-scale litigation by victims who were targeted through the company’s ad tools, since the documents suggest Meta understood the scope of the problem while continuing to sell the inventory that enabled it.
Those same Internal documents reviewed by Reuters reportedly show Meta Platforms, Inc projecting that a substantial portion of its 2024 advertising take would come from these suspect placements, which were concentrated in financial fraud, fake investment schemes, and other high pressure offers that prey on vulnerable users. The fact that Meta’s own teams categorized these as “high risk” scams, yet still tracked them as a revenue line, is central to emerging lawsuits that argue the company knowingly profited from deception on Facebook and Instagram, a claim that is now being tested in courts and could reshape how platforms are held responsible for the ads they run.
China’s role: billions tied to scam networks
The most explosive numbers in the Reuters cache relate to China, where Meta’s ad business has quietly ballooned despite its core services being officially blocked in the country. One report based on Internal documents reviewed by Reuters says Meta concluded that close to one fifth of its 2024 ad revenues from Chinese advertisers were linked to scams, a staggering share that underscores how deeply fraud has penetrated this lucrative market. Analysts who examined those figures warn that such a high concentration of deceptive campaigns not only hurts victims abroad but also distorts performance data for legitimate marketers who buy space alongside these operations and then struggle to compete with their aggressive tactics.
Separate investigative work focused on China found that Meta projected $16 billion of its 2024 revenue came from Chinese advertisers, with a large fraction tied to fraudulent or pornographic promotions that were designed to be fast moving and harder to shut down. One detailed special report concluded that 19 percent of Meta’s ad revenue in China was linked to scams and that the company reaped about $3 billion from China based scam advertising, while an outside consultant it hired warned that “Meta’s own behaviour and policies” were helping these networks thrive and that even after some enforcement, 16% of Meta’s China revenue still came from such activity. Taken together, these findings suggest that Meta’s China strategy has been built in part on tolerating scam-heavy demand that would be unacceptable in more heavily scrutinized Western markets.
The $3 billion headline and a global fraud footprint
Beyond China, the Reuters material points to a broader pattern in which Meta has become deeply entangled in the global fraud economy. One assessment cited by multiple summaries indicates that Meta earns about $7 billion a year just from the portion of scam ads it labels “high risk,” a figure that does not even capture lower tier deceptive campaigns that slip through its filters. Another analysis of the same trove reports that Meta has estimated it is now involved in as much as a third of successful domestic scams in at least one major market, a startling admission that suggests the company’s platforms are not just incidental conduits but central infrastructure for modern fraud.
In the China context alone, one report found that Meta Made $3 Billion in Revenue Through Scam Ads From China, Report Finds, attributing that figure to a detailed breakdown of how Chinese advertisers used Facebook and Instagram to push fake investment apps, counterfeit luxury goods, and explicit content disguised as dating services. A former senior insider has described the resulting ad fraud epidemic as “disappointing” and global in scope, saying that the new report reveals a pattern in which Meta’s integrity investments lagged far behind the scale of the problem and that the company’s own data showed significant scam exposure in multiple regions, not just in Asia.
Meta’s defense: “scams are bad for business”
Meta’s public response has been to insist that fraud is fundamentally at odds with its long term interests and that it is investing heavily to root out bad actors. In a recent corporate update framed around the idea that scams are bad for business, the company highlighted a series of Takeaways about its ongoing efforts, including new machine learning systems to detect suspicious behavior, partnerships with banks and telecoms, and a pledge to stop and take them down when scam campaigns are detected. The company also used the Global Anti Scam Summit to showcase case studies where it cooperated with law enforcement to dismantle cross border networks, arguing that these examples prove it is not turning a blind eye to abuse.
Meta has also pointed to raw enforcement numbers as evidence of progress, saying that Meta Platforms removed more than millions of scam ads in 2025 and that its Agency partners have been briefed on new tools to flag suspect creatives before they go live. In that same communication, Meta acknowledged that it still earns scam-linked advertising revenue but argued that the volume of removals, combined with new verification requirements and advertiser education, shows it is moving in the right direction. The tension, however, lies in the contrast between these public claims and the internal projections that treat high risk scam ads as a stable, forecastable revenue stream rather than a shrinking anomaly.
Regulators and attorneys general turn up the heat
Regulators and law enforcement officials are increasingly skeptical of Meta’s assurances, particularly as the Reuters findings circulate through policy circles. In one high profile move, AG Sunday Leads Bipartisan Coalition Urging Meta to Crack Down on Misleading A.I.-Fueled Weight-Loss Ads, with a group of state attorneys general warning that the platform is hosting promotions that use generative imagery and fabricated testimonials to make false guarantees about product effectiveness. The coalition’s letter argues that these Misleading, Fueled Weight, Loss Ads target vulnerable users with unrealistic promises and that Meta’s current screening systems are not catching them before they reach large audiences.
On the legal front, Meta remains on the hook in a key false advertising suit that tests whether its own marketing claims about safety and ad quality can be challenged under consumer protection laws. In that case, the plaintiffs appealed to the Ninth Circuit after a lower court dismissed several non-contract claims, and the appellate panel allowed core allegations to proceed, keeping pressure on Meta to defend how it represents its ad products to businesses and users. The fact that the Sep decision came as the Reuters documents were surfacing has only sharpened the focus on whether Meta’s internal knowledge of scam prevalence matches the assurances it gives in public and in its commercial materials.
Advertisers, marketers, and the “assessment” that backfired
For legitimate advertisers, the revelations land on top of long standing frustrations about opaque performance metrics and brand safety risks on Meta’s platforms. One detailed breakdown of the China situation notes that Meta’s massive ad fraud problem hurts marketers and Meta itself, explaining that Internal documents reviewed by Reuters showed how scam campaigns distorted auction dynamics, drove up prices, and made it harder for honest brands to reach their target audiences. Marketers who spend heavily on Facebook and Instagram now have to worry not only about competing with fraudulent offers but also about whether their own campaigns are being measured against a baseline polluted by fake clicks and low quality leads.
Inside Meta, the company commissioned an assessment to validate its planned integrity investments, including in combatting frauds and scams, only to discover that the scale of the problem was far more than they expected. That assessment, described in a detailed media analysis, reportedly quantified how much revenue was tied to high risk scam activity and how much it would cost to reduce that share through stricter enforcement, creating a stark trade off between short term income and long term trust. The fact that Meta chose to proceed with only incremental changes, rather than a sweeping crackdown that would have slashed revenue, is now central to critics’ claims that the company put profits ahead of user protection.
Former insiders and outside analysts warn of systemic failure
One of the most damning reactions has come from a Former Meta integrity chief, who said the new report reveals a “disappointing” ad fraud epidemic at the social media giant and that the scale of scam exposure globally, according to the report, shows the company’s integrity systems have not kept pace with its growth. In that interview, the former executive argued that Meta’s internal incentives reward teams for revenue and engagement, not for reducing fraud, and that this misalignment makes it difficult for integrity staff to win budget battles when their proposals would cut into profitable but risky ad segments. Coming from someone who once led the company’s safety efforts, that critique carries more weight than the usual outside commentary.
Financial analysts are also sounding alarms about the long term risks of Meta’s current approach. One investor focused breakdown titled Meta META’s China Scam Ads Exposure Puts Billions at Risk explains What Reuters uncovered about Chinese advertisers using sophisticated cloaking techniques and fake storefronts, and warns that regulators could eventually force Meta to refund or forfeit large sums if they determine that the company knowingly facilitated fraud. The same analysis notes that, According to internal projections, Meta’s exposure is not limited to China and that similar patterns of scam heavy revenue exist in other emerging markets, raising the possibility of a broader regulatory backlash that could hit the company’s valuation.
Meta’s own messaging vs. independent reporting
Meta has tried to counter the narrative of a company profiting from fraud by highlighting its own communications that emphasize enforcement wins and user education. In a widely shared social media post, the company framed the issue by saying that For Meta, getting hapless Facebook users to click on scam ads has turned into big business, then pivoted to claim that Meta Touts Major Wins in blocking such content and that it is rolling out new tools to help people spot scams and protect American users. The post, which referenced Facebook by name, was meant to reassure the public that the company is not complacent, even as it acknowledged that scam ads had become a significant problem.
Yet independent reporting continues to paint a more troubling picture. One detailed financial story under the banner Meta Tolerates Billions in Chinese Scam and Fraud Ad Revenue notes that Reuters reported last month that Meta earns $7 billion a year just from the portion of scam ads it considers “high risk,” and that internal discussions weighed the benefits of stricter enforcement against the potential loss of revenue. Another marketing focused piece titled Meta has reportedly been raking in billions from scammy ads reports that Meta has estimated that it is now involved in as much as a third of successful domestic scams in at least one jurisdiction, and that some internal teams worried that aggressive crackdowns might discourage them from placing ads that, while profitable, carried obvious red flags.
Real world harm: from sextortion to AI weight loss scams
Behind the spreadsheets and revenue projections are real people who have lost savings, dignity, and in some cases their lives. One harrowing case now in court involves two families who sue Meta over teens’ deaths by suicide, citing ‘sextortion’ scams that began on Instagram and escalated within days. In one of those tragedies, One boy joined Instagram on Sunday and was dead by Tuesday afternoon, and His mother says the app is to blame because the platform failed to protect him from predators who used fake profiles and coercive tactics that Meta had been warned about for years. The lawsuit argues that Meta knew it had a sextortion problem for years but did not implement adequate safeguards or age specific protections to stop these schemes from spreading.
At the same time, consumer protection officials are grappling with a wave of AI powered health and beauty scams that use Meta’s ad tools to reach millions. The bipartisan group led by AG Sunday has zeroed in on Misleading, Fueled Weight, Loss Ads that deploy synthetic before and after photos, fabricated doctor endorsements, and false guarantees about product effectiveness, all while targeting users who have searched for dieting tips or joined fitness groups. These cases illustrate how the same targeting and creative tools that make Meta’s platforms attractive to legitimate brands can be weaponized by fraudsters, and they raise the question of whether a company that profits from such campaigns can ever be trusted to police them aggressively enough.
Meta’s future: legal exposure, user trust, and the cost of cleaning up
The legal and financial stakes for Meta are now enormous. Class action specialists are already mapping out potential claims based on the Internal documents reviewed by Reuters, arguing that victims of financial fraud, sextortion, and deceptive health products could band together to sue Meta Platforms, Inc for knowingly facilitating scams on Facebook and Instagram. One detailed legal explainer notes that these internal records, which categorize certain campaigns as “high risk” and quantify their revenue contribution, could be used to argue that Meta had actual knowledge of the harm and failed to act, a key threshold in many consumer protection and negligence cases. If courts accept that framing, the company could face not just damages but also injunctive orders that force structural changes to its ad business.
Meta, for its part, insists that it is already investing heavily in solutions and that scams are bad for business in the long run because they erode user trust and drive advertisers to competitors. The company points to its participation in the Global Anti Scam Summit, its Takeaways about new detection tools, and its claim that Meta Platforms removed more than millions of scam ads in 2025 as evidence that it is serious about reform. Yet as long as internal projections show billions in revenue from high risk scam ads and outside investigations keep uncovering gaps between Meta’s promises and its practices, I expect regulators, courts, and the public to keep asking a simple, uncomfortable question: how much fraud is the company willing to tolerate as the price of growth?
The political and public pressure that could force change
Political scrutiny is also intensifying, and it is not limited to a single party or country. The bipartisan coalition led by AG Sunday, the ongoing false advertising case that survived at the Ninth Circuit, and the growing number of individual lawsuits like the families suing over sextortion all point to a shift in how policymakers view Meta’s responsibility for what happens on its platforms. Instead of treating scam ads as an unfortunate but inevitable side effect of scale, more officials now frame them as a predictable outcome of business decisions that prioritized rapid revenue growth over rigorous screening, and they are beginning to craft legal theories that reflect that view.
Public opinion, meanwhile, is being shaped not only by written investigations but also by visual reporting that brings the numbers to life. A widely circulated video segment titled Documents show Meta makes billions off of fraud describes how Nov internal projections showed Meta projected $16 billion dollar of its 2024 revenue came from Chinese advertisers and that a large share of that was tied to fraudulent campaigns, using charts and interviews to make the stakes tangible. As these stories spread, I suspect Meta will find it harder to rely on generic assurances about safety and will face mounting pressure to publish hard data, accept independent audits, and make changes that cut into the very scam linked revenue that Reuters first brought into the light.
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