Meta is facing a reckoning over how much of its business depends on advertising that looks legitimate but leads users into fraud, financial loss, and medical harm. Internal documents, regulatory complaints, and the warnings of former executives now point to a sprawling, systemic ad-scam machine that is not a side effect of the platform, but a core feature of how it makes money.
What began as scattered stories of fake investment pitches and bogus product offers has hardened into a portrait of a company that profits from deception at industrial scale, even as regulators, consumer advocates, and its own former leaders argue that the damage to users and to the broader digital ad market has become impossible to ignore.
The ex-Meta insider who calls it a “massive ad-scam problem”
When a former Meta executive describes the company’s ad business as a “massive ad-scam problem,” it is not the language of a disgruntled employee, it is a diagnosis from someone who helped build the system. I see that critique most clearly in the work of Leathern, a onetime policy and ads leader who has now teamed up with Rob Goldman, Meta’s former vice president of ads, to confront the very ecosystem they helped create. Their new venture, CollectiveMet, is premised on the idea that scam ads are not isolated glitches but a structural failure of how social platforms vet and target commercial messages.
Leathern and Rob Goldman are not speaking in abstractions. They are responding to a flood of fraudulent promotions that exploit Meta’s precision targeting and frictionless buying tools, a pattern detailed in reporting on how scam ads are flooding social media. By stepping outside the company and trying to build independent defenses, these former insiders are effectively arguing that Meta’s internal safeguards are either too weak or too compromised by revenue incentives to protect users on their own.
Inside the $16 billion scam-ad revenue machine
The scale of the problem comes into sharp focus once you look at Meta’s own projections. Internal documents indicate that the company expected $16 billion of its 2024 revenue to come from advertising that its own systems classified as fraudulent or high risk, a figure that turns what might sound like a niche compliance issue into a central pillar of the business. When I weigh that number, it is hard to avoid the conclusion that scam-driven spending has become deeply embedded in the company’s growth story.
Those same internal materials show how this revenue stream exposes cracks in digital ad policing, since the money flows through Meta’s auction systems even when the ads are linked to deception, inflated performance metrics, and eroded trust in the broader market. Reporting on Meta’s $16 billion scam ad problem underscores how this spending distorts prices, props up cost per thousand impressions, and leaves honest advertisers paying more to compete with fraudsters who are willing to mislead users to win clicks.
Fifteen billion “higher risk” ads a day
Even beyond the revenue projections, the raw volume of questionable ads coursing through Meta’s systems is staggering. Internal estimates indicate that users are being served 15 billion “higher risk” ads every single day, a category that includes promotions flagged as potentially fraudulent, misleading, or otherwise harmful. When I think about that number, it suggests that for many people, exposure to risky commercial content is not an occasional hazard but a routine part of opening Facebook or Instagram.
Those same internal figures suggest that Meta reportedly earns roughly $7 billion in revenue every year from these potentially fraudulent ads, which can include everything from fake investment schemes to bogus product offers, according to However, Meta. The combination of 15 billion daily impressions and billions in annual revenue from higher risk inventory makes clear that this is not a marginal corner of the platform, it is a core part of the feed that shapes what users see and trust.
How personalization turns one bad click into a cascade of scams
The mechanics of Meta’s ad-personalization system help explain why a single mistake can spiral into a sustained onslaught of scams. Once a user clicks on a deceptive ad, the platform’s algorithms infer interest and begin to prioritize similar content, effectively rewarding the fraudster with cheaper reach and more qualified targets. In practice, that means one impulsive tap on a fake investment pitch or a bogus health product can train the system to serve up more of the same, deepening the risk of financial or medical harm.
Internal documents describe how this personalization loop amplifies the reach of bad actors, since people who engage with scam ads are likely to see more of them, and the system optimizes for engagement rather than safety. Reporting on the company’s ad-personalization system makes clear that while Meta publicly emphasizes its efforts to block harmful content, its internal modeling shows a different reality in which engagement-driven optimization can supercharge the very scams it claims to be fighting.
Real users, real losses: why Facebook feels like a scam swamp
Behind the metrics are people who thought they were seeing trustworthy recommendations and instead found themselves trapped in a maze of fraud. One user, Kuhn, described how eerily accurate targeting made a fraudulent product pitch feel tailored to her tastes, only for her to discover that the seller never intended to deliver what was promised. Her experience captures a broader sentiment that Facebook has become a cesspool of scam ads, where the intimacy of personalization masks the impersonality of industrial-scale deception.
Stories like Kuhn’s, recounted in coverage that traces how The Cool Down and other pages are exploited by fraudsters, show how users can be lured into fake storefronts, counterfeit green-tech products, or bogus financial offers that mimic legitimate brands. When I look at those accounts, what stands out is not just the individual loss but the way repeated exposure to scams corrodes trust in the entire ad experience, making people more suspicious of even honest advertisers who rely on the same formats and placements.
Consumer Reports, the FTC, and a new regulatory front
The growing evidence of harm has pushed consumer advocates to demand that regulators treat Meta’s scam-ad problem as a matter of law enforcement, not just platform policy. Consumer Reports has called on the FTC and state attorneys general to investigate Meta’s failure to mitigate harmful scam advertisements, arguing that the company has allowed fraudulent promotions for financial schemes, fake health cures, and other dangerous products to flourish despite repeated warnings. From my vantage point, that call reflects a shift from asking Meta to do better to insisting that outside authorities compel change.
In its complaint, Consumer Reports urges the FTC to scrutinize how Meta profits from ads that promote the sale of banned medical products and other illegal or deceptive offerings, and it presses state attorneys general to use their consumer protection powers to curb the spread of these scams. The advocacy group’s statement that Consumer Reports is calling for coordinated federal and state action underscores how far the debate has moved from internal content moderation debates to questions about whether Meta is violating consumer protection and advertising laws.
Senators, regulators, and Meta’s defensive posture
Lawmakers have seized on the internal revenue projections as evidence that Meta is not just failing to stop scams but actively profiting from them. A group of US senators has demanded that the FTC and the Securities and Exchange Commission investigate whether the company misled investors or regulators about the extent of its reliance on fraudulent ads, citing the $16 billion figure as a sign that the problem is systemic. From a political standpoint, that demand signals that scam ads are no longer seen as a niche tech-policy issue but as a potential securities and consumer fraud matter.
Meta has responded defensively to this call for investigation. A company spokesman, Andy Stone, pushed back on the allegations, arguing that Meta does not want scam ads on its platforms and invests heavily in detection and removal, a stance captured in coverage of What Meta is saying. Yet when I compare that rhetoric with the internal projections and the volume of higher risk ads, the gap between public assurances and private expectations raises hard questions about whether enforcement is being calibrated to protect users or to protect revenue.
Meta’s public spin versus its internal numbers
Meta has tried to reassure the public that scam ads are a small fraction of its overall ad load and that its systems catch the vast majority before they reach users. In broadcast segments and public statements, executives have emphasized investments in artificial intelligence, expanded advertiser verification, and partnerships with law enforcement, presenting a picture of a company that is aggressively cleaning up its marketplace. On the surface, those claims suggest a platform that is at least trying to align its business incentives with user safety.
Yet internal documents and independent reporting tell a more complicated story. In one televised segment, a tech report on 41 Today on 41 NBC highlighted how Meta says a high percentage of its ads comply with policies even as leaked documents show the company projected billions in revenue from fraudulent campaigns, a tension captured in coverage of 41. Another investigation into how Meta is earning a fortune off fraudulent ads points to internal forecasts that $16 billion of 2024 revenue would come from scam-linked promotions, a figure that sits uneasily beside public claims that the company does not want such ads on its services.
Why the scam-ad crisis threatens the whole digital ad market
What makes Meta’s scam-ad problem so consequential is not just the harm to individual users but the way it distorts the broader digital advertising economy. When fraudsters can buy targeted reach at scale, misrepresent products, and still deliver high click-through rates, they can afford to bid aggressively in ad auctions, driving up prices for everyone. Legitimate advertisers then face a choice between paying more to compete with deceptive campaigns or pulling back from the platform altogether, a dynamic that undermines trust in performance metrics and return on ad spend.
Internal analyses of Meta for its failure to mitigate harmful ads, combined with the $16 billion revenue projection and the 15 billion daily higher risk impressions, suggest that scam-driven spending is large enough to warp auction dynamics and advertiser expectations. From my perspective, that is why former insiders like Leathern and Rob Goldman, consumer advocates like Consumer Reports, and regulators at the FTC and SEC are converging on the same conclusion: unless Meta is forced to treat scam ads as an existential threat to its business model rather than a manageable cost of doing business, the damage will extend far beyond one company’s balance sheet and into the foundations of the online ad market itself.
More from MorningOverview