Consumer Reports and the Consumer Federation of America today released the Stopping Abuse and Fraud Enabled by Platforms (SAFE Platforms) Act designed to address the problem of rampant fraudulent advertisements and solicitations on large online platforms. Last year, Reuters released a blockbuster investigation alleging that Meta projected it would earn 10% of its global revenue from ads for scams and illegal products, and that the company failed to take reasonable steps to shut down known perperators operating on their platforms. Consumer Reports has urged regulators to take action under existing laws, but new legislation would provide the clearer obligations and more robust enforcement needed to incentivize platforms to address fraud on their systems.
The SAFE Platforms Act would:
- impose liability on platforms that materially contribute to fraudulent solicitations,
- require that platforms offer reporting mechanisms and respond to reports of scams,
- introduce privacy defaults to limit solicitations from unknown users,
- mandate the collection and verification of identifying information from advertisers, and
- allow enforcement from state and local regulators as well as users harmed by violations.
Consumer Reports has endorsed the bipartisan SCAM Act in Congress as well as the SAFE Platforms bill previously introduced in New York state, both of which would impose similar requirements for large online platforms.