Safeguarding Consumers from Advertising Misconduct Act (SCAM Act)
New rules force social media platforms to verify that paid advertisements are not scams or deceptive. This reduces the risk of users falling for fake offers and makes it easier to seek compensation if financial losses occur.
Key points
Mandatory identity and location verification for all advertisers before a paid ad is displayed.
Platforms must implement impersonation detection systems and automated fraud detection tools.
Introduction of a clear and easy-to-use tool for users to report suspicious advertisements.
Requirement to investigate reports within 72 hours and remove fraudulent ads within 24 hours of concluding the investigation.
Right for citizens to sue platforms for damages, which can be tripled for willful violations.
Removal of legal immunity (Section 230) for platforms regarding their failure to prevent fraudulent commercial ads.
Status:
Introduced
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