The Facebook scam economy
+ Robot worms, #BootsOnlySummer, X merch drop, James Comey IG drama, high fashion Rizzler, a Palestinian streaming service, immigration reality show, and the biggest dating app faux pas for Gen Z
The Wall Street Journal’s Jeff Horwitz and Angel Au-Yeung just published a shocking investigation into Facebook and Instagram, revealing that the platforms are facing “an epidemic of scams” driven by crime networks.
Internal documents from 2022 show that 70% of newly active Meta advertisers promote scams.
The Facebook scam boom has exploded in recent years in large part due to the rise of cryptocurrency, generative AI and vast overseas crime networks based out of Southeast Asia. Employees have tried to flag the issue to executives, but the company has failed to take systemic measures to tamp down on the scams.
The WSJ reports:
Current and former employees say Meta is reluctant to add impediments for ad-buying clients who drove a 22% increase in its advertising business last year to over $160 billion. Even after users demonstrate a history of scamming, Meta balks at removing them.
One late 2024 document reviewed by the Journal shows that the company will allow advertisers to accrue between eight and 32 automated “strikes” for financial fraud before it bans their accounts. In instances where Meta employees personally escalate the problem, the limit can drop to between four and 16 strikes.
Adding to the problem is Marketplace, its online secondhand-market that in less than a decade since its launch has surpassed Craigslist to become the internet’s most heavily used repository of free classified ads. Its peer-to-peer model has also made Marketplace a popular hunting ground for scammers…
Meta has also argued in U.S. federal court that it bears no legal responsibility to address the issue.
“The alleged underenforcement of Meta’s monitoring policies cannot give rise to liability,” the company wrote last year in a motion to dismiss a lawsuit alleging negligence in removing cryptocurrency impersonation scams, adding that it “does not owe a duty to users” to address fraud on its platforms.
The details in the report are disturbing, especially if you have older people in your life still reliant on Facebook. The WSJ writes:
In recent months, accounts featuring grandmotherly photos have been running Facebook and Instagram ads for a supposed giveaway of a McCormick & Co. spice rack and a selection of its products. Users are asked to provide only a nominal $9.99 shipping fee via a website featuring McCormick branding, a user survey and a game to win prizes.
Marah Johnson of Orange County, Calif., has regularly encountered and reported scams on Facebook for years. But she fell for this one. After she entered her credit card information on the McCormick-branded website, she was billed for a series of fraudulent purchases totaling hundreds of dollars.
“If their revenue is coming from fraud, what is their incentive to protect people?” asked Johnson, a 58-year-old artist and jewelry-maker. “It feels like Meta is helping the scammers out.”
The Facebook scam economy is reliant on a steady stream of exploited workers, primarily in Southeast Asia, who work in prison-like compounds and are forced to perform under threats of “extreme forms of torture and abuse.”
Many of these workers are victims of scams themselves. They were trafficked after falling for fraudulent social-media employment ads on Facebook.
The entire piece is worth a read, and will hopefully make you think twice before purchasing anything off Facebook, Facebook Marketplace, or Instagram.
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