- Damning Pakinomist report exposes Meta’s unwillingness to tackle fraud
- 10% of Meta’s revenue apparently comes from fraudulent ads and illegal content
- Meta viewed harm reduction as threatened by regulators
The number of fraudulent ads and less-than-legitimate product listings on social media platforms certainly seems to have increased dramatically in the past few years, but a new report claims the websites themselves may be partly to blame.
Internal projections seen by Pakinomist reveal Meta, the company behind Facebook and Instagram, apparently earns 10% of its annual revenue from advertising scams and banned goods – equivalent to around $16 billion.
Documents also suggest the social media conglomerate ‘failed to identify and stop an avalanche of ads’, leaving billions of Instagram, Facebook and WhatsApp users at risk from the fraudulent ecosystem.
A so-called suppression
Over the years, Meta has publicized efforts to undergo ‘major crackdowns’ on organized crime, pork slaughter scams and social engineering attacks – even going so far as to remove up to 2 million accounts from the Facebook platform.
Meta told TechRadar Pro it is ‘aggressively fighting fraud’ on its platforms ‘because people on our platforms don’t want this content, legitimate advertisers don’t want it and we don’t want it either’.
“Fraudsters are persistent criminals whose efforts, often driven by ruthless cross-border criminal networks operating on a global scale, continue to grow in sophistication and complexity. As fraud activity becomes more persistent and sophisticated, so do our efforts. Unfortunately, the leaked documents present a selective view that distorts Meta’s approach to fraud and assessment of our efforts to assess fraud and fraud. not the full range of actions we have taken to address the problem.”
But these new documents revealed that even marketers suspicious enough to be flagged by Meta’s internal warning systems are often allowed to continue, only banned when fraud prediction reaches 95%.
This means that if Meta is 94% sure that an ad is deceiving its users – it is allowed to continue. Shockingly, Meta actually does more money from ads it believes are fraudulent – charging a higher ad rate as a penalty.
So is there really much of an incentive for Meta to remove scammers who prey on users? Even Meta doesn’t think so.
In the documents, Meta is reportedly weighing the revenue it earns from fraudulent ads and the regulatory fines it believes are inevitable if these high-risk fraudulent ads are not mitigated. Note here that Meta is not suggests that it would voluntarily do more to investigate advertisers to protect consumers, but rather that it would act under threat of imminent regulatory sanctions.
Thousands of scams have been discovered on Meta platforms with varying degrees of success and severity, but criminals undoubtedly make a lot of money from these tricks (and so does Meta). In the UK, Meta products were involved in as much as 54% of all payment-related fraud losses in 2023, the report reveals – detailing just how endemic this problem is, making it all the more abhorrent that Meta chooses to continue to profit from it.
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