Washington, DC – Consumer Reports announced its support for the Safeguarding Consumers from Advertising Misconduct (SCAM) Act, bipartisan legislation aimed at cracking down on predatory online scams.
The bill, introduced by U.S. Senators Ruben Gallego (D-AZ) and Bernie Moreno (R-OH), would require online platforms to take reasonable steps to prevent fraudulent and deceptive ads and strengthen accountability when scams appear. Specifically, the legislation would require online platforms to verify the identities of those looking to place advertisements, and have a specified process for reviewing reports of fraud, among other provisions.
“American consumers are increasingly falling victim to online scams with little recourse. These scams can be hyperrealistic and can have devastating financial consequences. Major tech companies should take some responsibility for allowing online scams to flourish and failing to protect their users. Instead, they too often turn a blind eye, prioritizing profits over user safety. This bipartisan bill will introduce new protections and accountability measures that will help keep consumers safer from online scams” said Grace Gedye, a Senior Policy Analyst for AI at Consumer Reports.
Last year, a Reuters investigation found that Meta — citing its own internal documents — delivered an estimated 15 billion scam ads per day to users in 2024. Meta, which operates Facebook, Instagram, and WhatsApp, failed to remove the vast majority of these ads, and failed to follow up on 96% of valid fraud reports, according to internal staff estimates. The platforms expose billions of users to fraudulent e-commerce schemes, investment scams, romance and impersonation scams, illegal online casinos, and banned medical products. CR sent a letter to the FTC urging action against the platform for failing to take reasonable steps to address fraud and scams.
CR recently released a study on how AI voice cloning tools can facilitate fraud and impersonation. CR assessed six products available for free or low cost online, and found that a majority of the products assessed did not have meaningful safeguards to stop fraud or misuse of their product.
CR also published its fourth annual Consumer Cyber Readiness report last year, which found a significant rise in text message–based scams targeting consumers.
Contact: Cyrus Rassool, cyrus.rassool@consumer.org