Meta makes billions of dollars from advertising scams and banned goods. The company… charges them higher rates

At the end of last year, Meta forecast that approximately 10 percent its total annual revenue – or $16 billion – will come from scam ads and banned goods, according to internal company documents reported by Reuters on Thursday.

The documents reviewed by the agency also show that for at least three years Meta has failed to identify and stop an avalanche of advertisements exposing Facebook, Instagram and WhatsApp users to fraud from non-existent e-shops, shady investment platforms, illegal online casinos or entities selling banned medical products.

The document from December 2024 shows that On average, Meta serves approximately 15 billion “higher risk” ads to users of its platforms every day. – those that show clear signs of fraud. Another document from late 2024 shows that this category of fraudulent ads Meta earns approximately $7 billion each year.

As Reuters writes, many of the fraudulent ads came from advertisers who were detected by Meta's internal warning systems. However, according to the documents, the company it only blocks advertisers when its automated systems have at least 95 percent. certainty that it is a fraud. If Meta does not have this level of confidence but still suspects that the advertiser is a fraudster, Meta charges higher advertising rates to discourage shady advertisers from placing ads.

The documents note that people who click on deceptive ads will likely see even more of them due to Meta's ad personalization system, which tries to deliver ads based on user interest.

Lack of regulatory oversight of the advertising industry

Reuters explains that the documents were prepared between 2021 and 2025 by Meta's finance, lobbying, engineering and security departments. As Reuters writes, “collectively, they reflect Meta's efforts to assess the scale of abuse on its platforms – and the company's reluctance to take actions that could harm its business interests.”

– Meta's acceptance of revenues from sources it suspects of fraud proves the lack of regulatory supervision over the advertising industry. If regulators don't tolerate banks profiting from fraud, they shouldn't tolerate it in the tech industry either, Sandeep Abraham, a fraud expert and former security investigator at Meta who now runs the consulting firm Risky Business Solutions, told Reuters.

In a statement, Meta spokesman Andy Stone argued that the documents described by Reuters “present a selective picture that distorts Meta's approach to fraud and extortion.” He explained that the company's internal estimates, according to which 10.1 percent its 2024 revenue was expected to come from fraud and other prohibited ads were “approximate and too general,” and the company later determined the actual number was lower because the estimate also included “many” legal ads. However, he refused to provide updated data.

– Over the last 18 months, we have reduced user reports of fraudulent advertising by 58% globally.and we have removed over 134 million pieces of fraudulent advertising so far in 2025,” Stone said.

As Reuters points out, some documents show that Meta intends to take further actions. “We have ambitious goals to reduce ad fraud in 2025.” – it was written in a document from 2024, in which Meta hopes to reduce such advertising in some markets by up to 50%. Elsewhere, the documents show managers congratulating employees on successful efforts to reduce fraud.

At the same time, the documents show that Meta's own research suggests that its platforms have become a pillar of the fraud economy. A May 2025 presentation by security officials estimated that one-third of all successful frauds in the U.S. were conducted through Meta platforms. In other internal documents, Meta has acknowledged that some of its competitors, such as Google, are doing a better job of eliminating fraud on their platforms. (PAP)

bjn/ kar/