Legislation to hold social media companies accountable for the scam ads appearing on their platforms would reduce consumer fraud losses by targeting “a key entry point” for the crime, the American Bankers Association and 52 state bankers associations said in a joint letter to members of Congress.
The Safeguarding Consumers from Advertising Misconduct, or SCAM, Act (S. 3774 and H.R. 7548) would require online platforms to implement procedures to verify an advertiser’s identity before placing an ad. Platforms must also implement a program to detect impersonation on their site.
A recent report by the FBI’s Internet Crime Complaint Center found Americans lost nearly $20.9 billion to cybercrime last year, representing a 26% increase from the previous year and likely an underestimate, as much fraud isn’t reported. The associations noted that criminals increasingly rely on fraudulent or misleading paid ads to impersonate trusted financial institutions.
“Paid advertisements are not neutral or passive user content,” they said. “They are commercial products that platforms actively curate, target and monetize. Platforms that profit from advertising should bear responsibility for preventing the dissemination of fraudulent paid ads.”
The associations also said they support the bill’s focus on interagency coordination to combat ad-based scams.
“Banks work with state attorneys general, financial regulators and law enforcement to respond to fraud trends affecting local communities, and clear federal authority and coordination are essential to ensuring these efforts are effective and consistent across jurisdictions,” they said.
