Meta estimates it earns 10% of its revenue from fraud, the report says

Last year, Meta predicted that 10% of its total annual revenue — $16 billion — would come from fraudulent ads on its apps, according to a new report. a report From Reuters.

Documents obtained by Reuters also show that Meta failed for three years to protect its users from ads promoting illegal gambling, investment schemes and banned medical products. These fraudulent ads aim to offer a product or service that is not actually real, and may be intended to solicit payments from less experienced users.

Meta has a system to detect the possibility that an ad campaign is a scam, but the company only deactivates an advertiser’s account if it is 95% sure the advertiser is committing fraud. Otherwise, Meta will charge more money from advertisers it suspects may be fraudulent as a way to discourage them from buying more ads — but when those advertisers follow through anyway, it supports Meta’s bottom line.

TechCrunch contacted Meta for comment, but did not receive a response before publication. According to the Reuters report, Meta spokesman Andy Stone claimed that the documents used by Reuters “present a selective view that distorts Meta’s approach to fraud and scams.”

Over the past 18 months, Meta has reduced user reports of fraudulent ads by 58%, and the company has removed more than 134 million fraudulent ads from its platforms, Stone added.