Advertisers on Meta may be unknowingly competing against suspected scam ads that stay in auctions at higher “penalty bid” prices.
Internal documents obtained by Reuters estimate that around 10% of Meta’s 2024 ad revenue, approximately $16 billion, would come from scam ads and banned goods.
Although Meta disagrees with these estimates, the real impact for advertisers includes potential increases in CPM, brand safety concerns, and uneven enforcement risks.
What Advertisers Should Know
Meta reportedly displays an estimated 15 billion ‘higher-risk’ scam advertisements daily across Facebook, Instagram and WhatsApp.
Meta earns about $7 billion annually just from these higher-risk scam ads that show clear signs of fraud, a late 2024 document states.
The company only bans advertisers when automated systems predict they are at least 95% certain to be committing fraud. Advertisers below that threshold face higher ad rates as a penalty but can continue running campaigns.
Internal Review: Easier To Run Scams On Meta Than Google
An internal Meta review concluded it’s easier to advertise scams on its platforms than on Google. The document doesn’t explain why.
Meta restricted anti-scam enforcement in the first half of the year to actions costing no more than 0.15% of total revenue, or approximately $135 million. A manager overseeing the effort wrote: “Let’s be cautious. We have specific revenue guardrails.”
Company spokesman Andy Stone said the internal estimates were “rough and overly-inclusive” and included many legitimate ads. He declined to provide an updated figure.
Meta reduced user reports of scam ads globally by 58% over the past 18 months and removed more than 134 million pieces of scam ad content in 2025, Stone said.
Why This Matters
On Meta’s platforms, internal documents projected about one in ten ad dollars in 2024 came from ads for scams and banned goods.
Meta’s penalty bid system charges suspected scammers higher rates but keeps them in ad auctions. You don’t know when you’re bidding against these inflated rates.
The revenue guardrails mean Meta caps how much fraud enforcement it will do if it impacts financial projections. Small advertisers must be flagged eight times for financial fraud before getting banned. Some large “High Value Accounts” accrued more than 500 strikes without Meta shutting them down.
A Meta presentation estimated the company’s platforms were involved in one-third of all successful scams in the United States.
The SEC is investigating Meta for running ads for financial scams, according to internal documents reviewed by Reuters. The UK Payment Systems Regulator said Meta’s products were linked to 54% of payment-related scam incidents in 2023.
What Meta Says
Stone clarified that the idea Meta should only take action when regulators demand it isn’t how the company operates.
He explained that the 0.15% figure mentioned in strategy documents was based on a revenue forecast and isn’t a strict cutoff. Additionally, testing the penalty bid program revealed a decrease in scam reports and a small dip in total ad revenue.
The main goal was to cut down on scam advertising by making suspicious advertisers less competitive in auctions.
Meta also outlines recent enforcement actions against scam centers in a Newsroom update.
Looking Ahead
Meta plans to lower the share of revenue from scams, illegal gambling, and prohibited goods from an estimated 10.1% in 2024 to 7.3% by the end of 2025. The target is to reach 6% by the end of 2026 and 5.8% in 2027, as outlined in strategy documents.
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