SCAM Act

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.