The Meta of Perverse Incentives

If you have spent any time on Facebook, Instagram, Twitter, or TikTok, you have probably come across an advertisement that looked suspicious, or phishy, you may have even tried to buy something, entered a sweepstakes, or just mistakenly clicked on an ad, and had your information stolen.

Up until a month ago, we could only guess at the number of malicious advertisements on social platforms, until someone leaked documents from Meta’s internal Safety Team. Those documents, as reported by Reuters, paint a damning portrait of Meta’s approach to user safety, and give us some idea about the massive amounts of money being made by both Meta, and the people using their ad services to scam, phish, and defraud users.

If you have the time, take a read:

[embed]Meta is earning a fortune on a deluge of fraudulent ads, documents show Meta projected 10% of its 2024 revenue would come from ads for scams and banned goods, and it internally estimates that…www.reuters.com

This didn’t hit the news in a big way, thanks to the report being dropped the day after the 2025 off-year elections.

The short version? 10% of Meta’s total revenue in 2024 came from ads that were identified by Meta as being fraudulent, or linked to scams. That comes out to $16 Billion, the approximate GDP of Moldova.

Even worse, users who interacted with fraudulent ads were fed even more of those types of ads, thanks to Meta’s ad-personalization services. This means that if someone is more susceptible to malicious ads, they were funneled even more of those ads.

How does that compare against the total number of scams in the United States?

A May 2025 presentation by its safety staff estimated that the company’s platforms were involved in a third of all successful scams in the U.S.

33% of all successful scams in the United States used Meta’s platforms. This isn’t just a domestic issue-

In Britain, a regulator last year said it found that Meta’s products were involved in 54% of all payments-related scam losses in 2023, more than double all other social platforms combined.

Now, it isn’t like Zuck is taking this lying down. Meta has an ‘innovative’ enforcement mechanism. First: They ban an ad account if their automated system flags the likelihood of the advertisement being fraudulent at over 95%.

For anyone who falls below that level of certainty, and this is the ‘innovative’ bit: Meta simply raises the rates for that buyer. While this could, in some other world, be a way to discourage people from running fraudulent ads, it seems pretty clear that those price increases were not any kind of deterrent. Meta set a higher price tag for trying to scam people, and the fraudsters have accepted the cost of doing business. They both made money on those advertisements, and they haven’t stopped.

And just in case you thought that reporting a suspicious advertisement would help, well…

Meta also was ignoring the vast majority of user reports of scams, a document from 2023 indicates. By that year, safety staffers estimated that Facebook and Instagram users each week were filing about 100,000 valid reports of fraudsters messaging them, the document says. But Meta ignored or incorrectly rejected 96% of them.

If Meta’s report/flag system is not used to reduce the number of bad actors, and if those same bad actors do not seem to care that Meta is raising their rates: then Meta is not operating any kind of functional program to reduce the number of fraud victims that were scammed using their services.

In the interest of objectivity, which tends to be in short supply these last few years, Meta’s leadership disputed the number, internally, claiming that too many legitimate ads were included within the report. They did not, however, provide any updates to that estimate.

And, in fairness to Meta, they are not the only platform earning some portion of their revenue through fraudulent advertisements. They are, however, one of the only ones to have their internal numbers leaked. Spend any time on the internet, as you may well know, and you will find sketchy ads everywhere there are advertisements being shown.

There are already a few law firms putting together class actions for those who may have been defrauded through advertisements on Meta’s platform. If history is any indication, Meta will settle out of court and have everyone involved sign an NDA, so they aren’t held accountable for maximizing profits from scammers. The same way they weren’t held accountable for falsifying views on videos to get more creators to move to Facebook. Or running a lot of those creators out of business after Meta paid out on the actual views, not the inflated views. Or contributing to political violence in India and Myanmar. Or spreading vaccine-related disinformation. The list could go on, and it will, as long as Meta is still operating.