Meta -fighting a 'epidemic of scams' as criminals flooded Instagram and Facebook

Copyright © HT Digital Streams Limit all rights reserved. Jeff Horwitz, Angel Au-Yeung, The Wall Street Journal 8 min Read May 16, 2025, 10:26 am Ist Meta-Struggle with a major scam ads on Facebook and Instagram, which, despite warnings and reports, harms users and businesses. In summary false puppies and false offers of bargains are regularly sown by overseas crime networks; Employees say the company is reluctant to hinder its advertisement -Juggernaut for almost two years. Edgar Guzman gets calls from ominous clients who responded to his ads on Instagram and Facebook. Or at least they thought it was his ads. Guzman’s business, called ‘Half-Off Wholesale’, offers home improvement supplies and garden equipment in bulk from a suburban Atlanta warehouse. The ads offer steep discounts made to the bargain hunters: $ 29 for a Palet power tools, and mixed boxes with, for example, Amazon.com with a starting bid of just $ 1, for example. But if people send their payments, the products never come up. If they call Guzman to complain, he must deliver the bad news: they are swung. “What sucks is that we have to break it to people that they are cheated-we don’t even do online sales,” he said, noting that complaints about the RIP-offs generate bad online reviews for its real business. “We keep reporting pages to Meta, but nothing ever happens.” Guzman’s experience is not uncommon. Meta platforms, the parent company of Facebook and Instagram, are increasingly a cornerstone of the Internet -Missy Economics, according to regulators, banks and internal documents reviewed by the Wall Street Journal. The company accounted for almost half of all reported scams on Zelle for JPMorgan Chase between the summers of 2023 and 2024, according to a person familiar with the service. The peer payment platform is owned by various bank giants, including JPMorgan, the country’s largest bank and Wells Fargo. Other banks offered by Zelle have experienced similar demands for high fraud, according to people who are familiar with the case. British and Australian regulators found similar fraud that originated on Meta’s platforms. In an internal analysis of 2022, described in company documents, also found that 70% of newly active advertisers on the platform promotes scams, illegal goods or “low quality” products. If people contact Guzman to complain that they did not receive products, they thought they had ordered from his business, he should give the news to them that they were cheated. In the case of Guzman, a search for Meta’s advertising library this spring showed that more than 4400 different ads containing the address of his business have been offered on Meta’s platforms over the past year. Guzman’s real business was responsible for 15 of them. Account information for the scam pages shows that they are out of China, Sri Lanka, Vietnam and the Philippines, but they use stolen photos of half-off’s warehouse and list its address. With more than 3 billion daily users on Meta’s platforms, fraud is hardly a new phenomenon for the business. But fed by the rise of cryptocurrencies, generative AI and major overseas crime networks based from Southeast Asia, the tremendous Meta’s scam problem is growing and has been regularly marked by employees over the past few years. Current and former employees believe Meta is reluctant to add obstacles for advertising that has increased a 22% increase in its advertising industry last year to more than $ 160 billion. Even after users demonstrate a history of scams, Meta beams have removed it. One document of the late 2024 reviewed by the magazine shows that the company will enable advertisers to pick up between eight and 32 automatic “strikes” for financial fraud before prohibiting their accounts. In cases where Meta employees personally escalate the problem, the limit can drop to between four and 16 strikes. The market is Marketplace, and the online second-hand market that has surpassed Craigslist in less than a decade since its launch to become the Internet’s most used repository of free classified ads. The peer model has also made Marketplace a popular hunting field for scams. A spokesperson for the Meta said the company is addressing an epidemic of scams’ that has grown in scale and complexity over the past few years, powered by border -crossing criminal networks. “As this scam activity became more persistent and sophisticated, our efforts also made,” he said. He added that Meta tested the use of facial recognition technology, adding warnings to users on its platforms and building partnerships with banks and technical enterprises “as this crime affects many industries and cuts in different parts of society.” Meta also argued in the US Federal Court that it has no legal responsibility to address the case. “The alleged companies of Meta’s monitoring policies cannot give rise to liability,” the company wrote last year in a motion to reject a lawsuit claiming negligence in the removal of cryptocurrency ability fraud, adding that it does not owe a duty to users. ” The spokesman said the company was making efforts to do so. “Of course, we do not want scammy activities on our platform, and nothing about this statement – a nuanced legal argument – must be read to suggest otherwise,” he said. Mark Zuckerberg’s recent move to Fake Giveaways Meta Chief Mark Zuckerberg to scale the fact control and policing of hate speech and other problem content has upset some people and satisfied others. But the continued inefficiency of his business in managing fraud on his platforms has investigated less – although it causes widespread and tangible problems for consumers and businesses. Meta’s LAX approach has helped to stimulate the professionalization of fraud on social media by international criminal networks in Southeast Asia, says Erin West, a recently retired prosecutor of Santa Clara County who helped the author an American Institute of Peace Report on such activities. The report estimated that organized operations-which regularly called ‘pig slaughtering’ groups-hundred thousands of people did many trafficking after falling for fraudulent advertising on social media. The workers are kept in prison -like connections, and are forced to work under an extreme forms of torture and abuse. ‘West said the growth of this nightmare industry stems directly from the lack of Meta and, to a lesser extent, its social media counterparts. “If there’s anyone who can make a big dive here, it’s meta,” she said. “But there’s no hammer over their head.” Erin West, a recently retired prosecutor of Santa Clara County, investigated in social media by international criminal networks. Losses to scams on Meta can extend into hundreds of thousands of dollars, but there is apparently no target too small. Some of the fraud reflects considerable complexity and effort. In recent months, accounts with Grandma photos have offered Facebook and Instagram ads for a suspected giving away from a McCormick & Co. Spice Rack and a variety of its products. Users are asked to deliver only a nominal delivery fee of $ 9.99 via a website with McCormick Branding, a user survey and a game to win prizes. Marah Johnson of Orange County, California, has been regularly encountered and reported on Facebook for years. But she fell for this one. After entering her credit card information on the McCormick brand website, she was billed for a series of fraudulent purchases totaling hundreds of dollars. “If their income comes from fraud, what is their incentive to protect people?” Ask Johnson, a 58-year-old artist and jewelry maker. “It feels like Meta the scammers are helping.” The scam is sufficiently widespread that McCormick Brands warned its 2 million followers on Facebook and Instagram on January 31, and provoked hundreds of comments from users who said they were cheated. “I feel so stupid,” one wrote. “I beat for $ 70 I can’t afford,” another answered. “Why can’t Facebook police police police?” Ask a third. A spokeswoman for McCormick declined to comment. Small puppies for sale One of the most common scams seen by banks involves the sale of pets, despite the rules of Meta prohibiting ‘peer-to-peer sales or trade’ of live animals outside now contexts. A recent search for ‘puppies’ over a few days has produced thousands of ads, with most with no connection with a well -known dog breeder or rescue organization as the rules of Meta need. Other red flags abounded. Many of the results showed common features of scams, including stolen photos of specific pets and advertisements of sellers who are believed to be ‘near me’ that actually works from Cameroon. An advertisement for Bulldogs on Facebook. According to a person familiar with the case, JPMorgan repeatedly raised concerns about the policing of scams. The person said the amount of scams that can be attributed to Meta has shown some improvement in recent months. During that period, both Meta and Zelle began to issue warnings to their respective users about scam risks arising from peer payments. Documents revised by the magazine show that Meta has deprioritized the scam maintenance over the past few years, with an emphasis on the avoidance of incorrect advertising on safety issues. The company also cut costs and transferred resources to other issues in the reform. The company has abandoned plans for verifying the advertising verification, similar to what it instructs political advertising, people who are familiar with the case, on the grounds that they are concerned about the loss of market revenue who can pass unwillingly or not identity controls. Meta has periodically declared “terrain events” – a snake for internal emergencies of varying severity – for nails in scams. But the company has generally treated scams as documents describe as a ‘low severity’ issue of user experience, rather than a significant threat to vulnerable people or vector to organized international crime. One document of 2022 describes “lack of investment” in building automatic tools to identify scams. The work’s low priority within Meta was codified in an update that year of content processing processes that put more resources to promote human trafficking and content to promote suicide and self -damage, and less on shading measures. In an analysis of re-prioritization in the mid-2022, it was found to result in a 46% drop in the likely scams revised within Facebook groups. The meta spokesman said the documents seen by the magazine are old and that the company has increased its investments in anti-SCAM work since the second half of 2022. He said it had decreased more than 2 million accounts linked to organized fraud operations last year. Of the advertising accounts it closed, he said, almost 70% were caught within a week of their creation. Due to a safe haven in the US Telecommunications Act, known as Article 230, platforms are generally protected from accountability for the use of the user. Whether this protection applies to Meta’s ads is now tested by Andrew Forrest, an Australian mining billionaire and philanthropist who became frustrated in 2019 with the failure of Meta to remove fraudulent investment ads using its image and AI cloned voice. In a motion to reject the case last year, Meta argued that it is not obliged to require investment advertisers to verify their identity or show that they do not ‘re licensed to sell such products. “Since Meta has no duty to protect users from third-party content on its platform, the plaintiff cannot claim a negligence,” the company said. Write to Jeff Horwitz on [email protected] and Angel Au-Yeung at [email protected] Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Technology #FacecBook #Instagram Update Mint Specials