Internet’s Growing Epidemic of Fraudulent Ads

“I earned AED17,500 in one week and received a second income by investing in [Enter Company Name]”

If this text looks familiar, it should. It serves as the blueprint for one of the most common types of fraudulent ads that have appeared everywhere in recent years. The same message appears in dozens, if not hundreds, of similar ads, all using the names of trusted regional companies, including government agencies and financial institutions. They also often feature the likenesses of public figures, such as world-famous businessmen like Elon Musk and Kevin O’Leary, as well as trusted government officials from the targeted countries, all to make the scam seem more credible and “official.”

This is just one of the most clear examples of fraudulent ads currently seen on social media. Other examples include fake discounts and tempting prices that lead you to very professional-looking online stores. In the past, these fake websites were easy to identify because of their poor copywriting and lack of informational content. Now, they are harder to spot, even for internet veterans.

Scams have been around on the internet for a long time; they are actually older than the web itself. For many years, scams mainly used untrustworthy websites and fake offers sent through email and other methods. This often targeted the most vulnerable people, like the elderly. But with social media, that has shifted, as now anyone—even Gen-Zers who grew up with technology—can fall for them.

Add AI tools to the mix, and scammers suddenly gain superpowers. They can easily build an official-looking website, fill it with low-quality but convincing AI-generated images and copy. Then, after spending a few hundred dollars on social media ads, the scammers can reap the rewards.

The simplicity of these scams helped the shadow industry grow rapidly. In fact, a recent report by Reuters revealed that as much as 10% of Meta’s revenue comes from these fraudulent ads. That’s roughly $16 billion in 2024 alone.

The Reuters report cites internal documents about Meta’s handling of fraudulent ads. It states that for three straight years, the social media giant didn’t adequately protect users from deceptive ads promoting illegal gambling, fake investment schemes, and banned medical products.

Additionally, the report states that Meta has a system designed to estimate the probability that an ad campaign is fraudulent. However, the company only suspends an advertiser’s account if the system is at least 95% confident of misconduct. In other cases, Meta increases the cost of ad placements for accounts it suspects of fraud, supposedly to discourage continued advertising. When these advertisers keep buying despite the higher costs, the extra spending ultimately boosts Meta’s revenue.

The problem extends beyond a single platform. It’s a widespread problem that shows up on almost every social media and video-sharing site. Internet searches are likely one of the biggest culprits, as fake ads claiming to be the official portals for recharging toll gate balances or paying bills appear in search results, taking up top spots and enabling fraud. Some platforms have responded by banning ads with certain keywords, but the fraud remains widespread.

Besides the obvious victims of fraudulent ads, there is another group of victims: companies, especially small ones, operating in industries where scams are common. For most consumers, seeing a single scam ad about a small, niche online store will make them distrust all ads for that category, including legitimate ones. This causes legitimate businesses to spend more money with lower returns, while large companies are mostly protected because of their brand recognition.

All internet platforms claim to combat scams today, but experts doubt their sincerity. They argue there is a clear conflict of interest. Platforms have little motivation to fight fraudulent ads. Detecting and blocking these ads effectively costs a lot—both in extra expenses and potential revenue loss, which can be as high as 10%, according to the Reuters report.

There is no clear plan to combat fraudulent ads. Some experts believe that external pressure is the only solution, whether through users speaking out and taking firm stances or through government actions that could make fraudulent ads so costly that it’s no longer profitable to accept them.