SCAM Act
House Committee Targets Online Scams With New Rules Requiring Ad Verification and 72-Hour Takedowns
Legislative Progress
Key Points
- This bill requires social media sites and other online platforms to verify the identity of anyone who pays to run an advertisement. Platforms would have to check the advertiser's legal name, physical location, and government-issued ID to prevent scammers from using fake or stolen identities.
- Platforms must create systems to automatically and manually find deceptive ads, including those using AI-cloned voices or stolen images. They are also required to provide a simple tool for users to report suspicious ads they see while browsing.
- If a scam is reported, the platform must investigate it within 72 hours. If they find the ad is fraudulent, they must remove it within 24 hours. This aims to stop common scams like fake giveaways, romance fraud, and health scams before they reach more victims.
- The bill changes a long-standing law that usually protects websites from being sued over what users post. Under these new rules, platforms can be held legally responsible if they take money for an ad they failed to properly screen for fraud.
- The Federal Trade Commission and state officials would have the power to fine companies that do not follow these rules. Additionally, people who lose money to these scams would have the right to sue the platforms for their financial losses plus legal fees.
Impact Analysis
Personal Impact
Life & Work
Small businesses that advertise on social media would face new identity verification requirements before placing ads, including providing government-issued ID and proof of business existence. While this adds a layer of paperwork and could slow down ad placement, legitimate small businesses would benefit from reduced competition from scam advertisers who undercut them with fake products and stolen branding.
Programs
Activities
Milestones
Referred to the House Committee on Energy and Commerce.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
2 articles
Congress Moves to Hold Social Media Platforms Liable for Scam Ads
Reps. Dan Meuser and Lou Correa introduced the House version of the SCAM Act, which holds platforms liable for profiting from fraudulent ads. The bill requires 'reasonable steps' for verification, including government IDs, and sets strict 72-hour investigation timelines for reported scams.
Bipartisan bill to tackle social media scam ads introduced in US Senate
The Safeguarding Consumers from Advertising Misconduct Act (SCAM Act) mandates that online services verify advertiser identities using government-issued IDs. It aims to close legal loopholes that allow platforms to profit from scams without facing consequences.
Source Information
Document Type
Congressional Bill
Official Title
SCAM Act
Data Sources
Sponsor
Cosponsors
(1)Analysis generated by AI. Always verify with official sources.