Congress is coming for scam ads — and the new bill would force social platforms to ID-check advertisers
WASHINGTON — A bipartisan pair of U.S. senators is rolling out new legislation aimed at one of the internet’s most relentless headaches: scam ads that look legit until the money is gone. The proposal would push social media companies to verify who is buying ads on their platforms and could open the door to enforcement actions by the Federal Trade Commission and state attorneys general if platforms don’t take what the bill calls “reasonable steps” to stop fraudulent advertising.
The measure is called the Safeguarding Consumers from Advertising Misconduct Act — shortened to the “SCAM Act” — and it’s being introduced by Sen. Ruben Gallego, an Arizona Democrat, and Sen. Bernie Moreno, an Ohio Republican. In practical terms, the bill would require platforms to verify a government-issued ID for individual advertisers or confirm the legal existence of a business, then respond quickly when users or government entities report scam ads.
The pitch is simple: if a platform is making money from ads, lawmakers say it shouldn’t be able to shrug when ads turn into fraud pipelines. Moreno said companies running paid ads have a responsibility to ensure those ads aren’t fraudulent, and Gallego argued platforms shouldn’t profit while scams target Americans.
The bill’s arrival also follows a burst of attention around how much money scam advertising can generate. Reuters reported that a press release outlining the SCAM Act cited prior Reuters reporting that Meta internally projected a significant share of revenue tied to scam ads and other illicit products, though Meta has disputed the way those internal estimates were characterized and said the figures overstated the portion of revenue tied to policy-violating ads.
Supporters are lining up behind the idea. Reuters reported the American Bankers Association and AARP endorsed the legislation, a sign that the bill is tapping into broad frustration: banks get the fraud complaints, older Americans are frequent targets, and families are tired of seeing “sponsored” posts that lead to fake shops, fake crypto schemes, and impersonation scams.
The enforcement teeth are where the bill gets real. Noncompliance would be treated as a violation of the FTC’s ban on unfair or deceptive business practices, Reuters reported, and state attorneys general would be authorized to bring civil actions. That structure matters because it isn’t just a “best practices” suggestion — it creates legal exposure if platforms don’t build and maintain systems that actually work.
Social platforms have long argued that verification isn’t a cure-all. Reuters noted Meta has said verification rules are “not a silver bullet,” and the company says it aggressively fights scams because users and legitimate advertisers don’t want that content either. Still, lawmakers backing the SCAM Act are betting that forcing stronger advertiser identity checks — and requiring quick action on scam reports — would cut down the volume that reaches ordinary users in the first place.
What happens next is a familiar Washington test: does the bipartisan label translate into momentum, and can platforms convince enough lawmakers that existing safeguards are improving? Either way, the bill is landing in a moment when scam ads are a constant public complaint — and when “sponsored” no longer automatically means “safe.”
