Global Crime Rings Exploit Meta Platforms, Triggering Bank-Fraud Spike

Criminals are “flooding” Facebook and Instagram with bogus ads and marketplace listings, fueling what The Wall Street Journal calls an “epidemic of scams” that is ensnaring U.S. consumers and global regulators alike.

The Journal reports that Meta Platforms’ social networks have become a primary staging ground for fraud rings operating from China, Sri Lanka, Vietnam and the Philippines. Internal Meta documents reviewed by the newspaper show that 70 percent of newly active advertisers in 2022 were pushing scams, illicit goods or low-quality products. Banks are feeling the strain: nearly half of all scams reported on the peer-to-peer Zelle network at J.P. Morgan Chase between mid-2023 and mid-2024 originated on Meta properties, according to sources cited by the Journal. British and Australian regulators have logged comparable patterns.

Victims range from bargain hunters lured by $29 pallets of power tools to pet lovers paying “breeders” who never deliver. Atlanta liquidator Edgar Guzman told the Journal that more than 4,400 fraudulent ads have used photos of his warehouse, dwarfing the 15 legitimate ads he actually placed. Meanwhile, Meta’s internal strike system allows repeat offenders to rack up eight to 32 fraud violations before an account is banned, and fewer when employees personally intervene. Marketplace, now the internet’s most-visited classified site, has surpassed Craigslist in traffic — and, critics say, in scam potential.

“As this scam activity has become more persistent and sophisticated, so have our efforts,” a Meta spokesman told the Journal, noting that the company removed more than two million fraud-linked accounts last year and is testing facial recognition and warning labels while partnering with banks and technology firms.

The Journal notes, however, that Meta argued in a 2023 legal filing that it owes users no duty to police third-party fraud, pointing to the safe-harbor protections of Section 230. That stance has drawn criticism from former prosecutors who say the social-media giant is uniquely positioned to curb a scam industry that traffics workers and siphons hundreds of millions of dollars from consumers.

PYMNTS has chronicled the same trend. Recent coverage highlighted how AI-generated deepfakes and “pig-butchering” romance scams have migrated from fringe chat apps to mainstream platforms, while analytics firm Featurespace told PYMNTS that fraud defenses must now blend behavioral biometrics with consortium data to spot cross-channel mule activity in real time. As Meta tightens its ad rules, payments executives and fraud specialists will watch closely to see whether those measures meaningfully blunt a scam wave that is reshaping consumer trust across the digital economy.