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CybersecurityPodcastsHow the SCAM Act Would Encourage Platforms to Go After Scammers
How the SCAM Act Would Encourage Platforms to Go After Scammers
BankingDigital MarketingCybersecurity

ABA Banking Journal Podcast

How the SCAM Act Would Encourage Platforms to Go After Scammers

ABA Banking Journal Podcast
•February 4, 2026•9 min
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ABA Banking Journal Podcast•Feb 4, 2026

Why It Matters

Scam ads generate billions in revenue for tech giants while harming consumers, so tightening platform responsibility could dramatically reduce online fraud. The SCAM Act offers a timely legislative solution that could shift the cost of policing scams from victims to the platforms that host them, making it a critical development for both consumers and the financial industry.

Key Takeaways

  • •SCAM Act forces ad‑buyer KYC on social platforms.
  • •Platforms must remove deceptive ads within 24 hours after 72‑hour review.
  • •FTC and state AGs gain enforcement power over scam ads.
  • •Private right‑of‑action lets victims sue platforms for losses.
  • •ABA backs legislation as part of broader fraud‑prevention strategy.

Pulse Analysis

The bipartisan SCAM Act, introduced on February 4, targets the $16 billion revenue stream that major platforms earn from scam ads. By mandating know‑your‑customer (KYC) verification for every ad buyer, the bill forces social media companies to identify and register the entities behind deceptive promotions. This requirement mirrors successful international models and aims to cut the flood of fraudulent content that reaches consumers through Facebook Marketplace, Instagram, and similar channels.

Enforcement provisions give the Federal Trade Commission (FTC) clear authority to audit platforms’ detection and mitigation programs, demand a 72‑hour investigation of user reports, and require removal of proven scams within 24 hours. State attorneys general can also bring actions, and a private right‑of‑action empowers victims to sue platforms for actual damages. By carving out ad‑related content from Section 230 protections, the legislation holds platforms financially accountable for the ads they profit from, creating a strong deterrent against lax moderation.

The American Bankers Association (ABA) champions the SCAM Act as part of a broader ecosystem strategy that includes telecom reforms, coordinated federal‑state fraud task forces, and a proposed Office of Scam and Fraud Prevention. Reducing scam ads at the top of the funnel protects consumers and eases the burden on banks that often chase lost funds. For financial institutions, tighter ad controls translate into fewer fraud losses, lower charge‑back costs, and stronger customer trust—key outcomes that align with ABA’s ongoing fraud‑prevention initiatives.

Episode Description

Major tech platforms make billions of dollars from scammers who advertise on their sites, according to reporting from Reuters, and there's not much incentive for them to change their practices — yet. Sens. Ruben Gallego (D-Ariz.) and Bernie Moreno (R-Ohio) have introduced the SCAM Act, which would take steps to tackle these scams. ABA strongly supports the SCAM Act, and on this crossover episode of the ABA Banking Journal Podcast and ABA Fraudcast, Paul Benda discusses:

How the SCAM Act would introduce new know-your-customer and takedown requirements for tech platforms.

Why there aren't sufficient existing incentives for platforms to deal with the deluge of scam ads.

Enforcement mechanisms that give teeth to the SCAM Act's requirements.

How ABA's advocacy on this issue fits into the association's overall anti-fraud agenda

Show Notes

Major tech platforms make billions of dollars from scammers who advertise on their sites, according to reporting from Reuters, and there's not much incentive for them to change their practices — yet. Sens. Ruben Gallego (D-Ariz.) and Bernie Moreno (R-Ohio) have introduced the SCAM Act, which would take steps to tackle these scams. ABA strongly supports the SCAM Act, and on this crossover episode of the ABA Banking Journal Podcast and ABA Fraudcast, Paul Benda discusses:

  • How the SCAM Act would introduce new know-your-customer and takedown requirements for tech platforms.

  • Why there aren't sufficient existing incentives for platforms to deal with the deluge of scam ads.

  • Enforcement mechanisms that give teeth to the SCAM Act's requirements.

  • How ABA's advocacy on this issue fits into the association's overall anti-fraud agenda

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