The SCAM Act would make it illegal for an online platform to display a paid advertisement that is fraudulent or deceptive if the platform accepted payment and did not take reasonable steps to prevent the ad. The bill requires paid-ad platforms to verify advertiser identity and location, collect contact information, and take steps to stop fake or stolen identities. Platforms must run impersonation detection, use automated and manual systems to find scam ads, and give users a clear way to report suspected scam ads.
When a report or the platform's system flags a suspect ad, the platform must investigate within 72 hours and tell the reporter the outcome within 24 hours after finishing the investigation. If the platform determines the ad violates the Act, it must remove the ad within 24 hours of that determination. The Federal Trade Commission (FTC) must write rules within one year to implement the law and will enforce the law like other FTC rules. The bill also allows states to sue on behalf of residents and allows people harmed by a violation to bring private lawsuits for damages, restitution, and attorneys' fees. The bill states that section 230(c)(1) of the Communications Act does not apply to violations of this Act. The bill also directs the FTC to report within 9 months on online scams involving financial transactions and whether more rulemaking or laws are needed.
No publicly available information about estimated federal budget costs or estimates of costs to platforms, businesses, or consumers is included in the bill text.
The bill's findings say online platforms are a main route for scams and advertising fraud, that many people lose money after contact on social media, and that platforms have sometimes weakened advertiser checks to keep ad revenue. The sponsors argue stronger advertiser verification, scam detection, and FTC oversight are needed to protect consumers and restore confidence.
No publicly available information about opponents' views or objections appears in the provided bill text.