Meta earns revenue from scam and prohibited ads: Reuters says
Reuters reported that 10% of Meta’s 2024 revenue – roughly $16 billion – came from advertising tied to scams and prohibited goods, based on internal documents reviewed by the team.
The materials reveal that Meta (the parent of Facebook, Instagram, and WhatsApp) projected late last year that 10.1% of its 2024 revenue would come from ads for scams and banned goods. One December 2024 document put suspected scam ad exposure at roughly 15 billion impressions a day, with around $7 billion in annualized revenue from the “higher risk” category.
Meta’s internal files describe billions of “higher-risk” scam ads on Facebook and Instagram. The company set a 95% certainty threshold before banning suspected fraudsters. Instead of removing lower-certainty accounts, it charged them higher ad rates. Typically, advertisers were banned only when automated systems flagged at least a 95% probability of fraud. When the likelihood was lower, Meta applied “penalty bids,” letting suspected scammers pay more to win ad auctions. This reduced some exposure but increased Meta’s revenue from those ads.
The documents show Meta balancing enforcement and revenue. A February 2025 note said teams could not take actions costing more than 0.15% of company revenue in H1 2025 – about $135 million on $90 billion in sales. Strategy papers outlined plans to reduce revenue from scam ads from 10.1% in 2024 to 7.3% by the end of 2025, 6% in 2026, and 5.8% in 2027. Another memo estimated Meta earned $3.5 billion every six months from high-risk scam ads, exceeding potential regulatory settlements.
Sandeep Abraham, a fraud examiner and former Meta safety investigator, told Reuters: “If regulators wouldn’t tolerate banks profiting from fraud, they shouldn’t tolerate it in tech.”
Internal records also point to poor handling of user-reported scams. A 2023 document said Meta ignored or incorrectly rejected 96% of valid scam reports on Facebook and Instagram. Enforcement thresholds allowed small advertisers multiple strikes and let some high-spending accounts accrue hundreds of violations before shutdowns. Four campaigns removed earlier this year generated $67 million in monthly ad revenue.
Regulatory pressure is growing. The U.S. Securities and Exchange Commission is investigating Meta over financial scam ads, and a UK regulator found Meta’s products were involved in 54% of payment-related scam losses in 2023. Meta anticipated up to $1 billion in fines, according to one internal document.
At the end of October, the company reported revenue of over $51 billion, up 26% year over year. Advertising accounted for 98% of its income.
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