Two House lawmakers have introduced legislation directing social media companies to take steps to fight fraudulent advertisements on their platforms. A companion bill was introduced last week in the Senate.
The Safeguarding Consumers from Advertising Misconduct, or SCAM, Act by Reps. Dan Meuser (R-Pa.) and Lou Correa (D-Calif.) would create new requirements for social media platforms while also enhancing enforcement of consumer protection laws by the Federal Trade Commission and state authorities, according to its sponsors.
“While many social media companies have begun investing in scam detection and prevention tools, fraud losses continue to surge,” the sponsors said in a statement. “Criminals are still able to purchase advertisements, impersonate legitimate businesses and target vulnerable users at scale.”
American Bankers Association President and CEO Rob Nichols commended Meuser and Correa for sponsoring the bill.
“Each year, Americans lose billions of dollars to scams that originate in ads that appear on social media platforms, and this legislation requires social media companies to take reasonable steps to identify and prevent fraudulent and deceptive ads before they can do any damage,” Nichols said. “We urge lawmakers to support this legislation and join the banking industry and other stakeholders in the fight against fraud.”
