BILL NUMBER: S8605
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the general business law, in relation to requiring
social-media platforms to prevent, detect, and remove fraudulent adver-
tisements
 
PURPOSE:
To protect New York consumers from fraudulent, deceptive, and harmful
advertisements on social-media platforms by requiring those platforms to
verify advertisers, review ads prior to publication, remove fraudulent
content, maintain vetting records, and report fraud-prevention activ-
ities to the state.
 
SUMMARY OF PROVISIONS:
Section 1 Declares that fraudulent advertisements on social-media plat-
forms have proliferated, causing monetary losses and harm to vulnerable
consumers. Current law does not adequately require digital platforms to
screen ads or verify advertiser legitimacy. To prevent foreseeable harm
and ensure responsible advertising practices, the act establishes clear
duties for social-media platforms.
Section 2 adds a new Article 33-C to the General Business Law, the
"Fraudulent Social-Media Advertising Prevention Act" in sections 699-a
through 699-d. Defines key terms in § 699-a - Definitions including
"platform," "advertisement," "advertiser," "fraudulent advertisement,"
and "vetting process." Also requires platforms in § 699-b to verify
advertiser identity before publishing ads, including legal name, phys-
ical address, government-issued identification for individuals, and
business or tax documentation; Maintain a reasonable good-faith vetting
process, including screening ad content, reviewing landing pages,
comparing advertising statements against actual offerings, and using
automated or manual systems to detect fraud; Provide mechanisms for
users and the Attorney General to report suspected fraudulent ads;
Remove or disable ads reasonably suspected of fraud, and promptly remove
ads upon credible notice; and maintain records for at least five years
of all verification materials, ad approvals or removals, consumer
reports, and actions taken.
Adds reporting requirements § 699-c. Requires each platform to file
quarterly reports with the Attorney General detailing: Total advertise-
ments reviewed; Number rejected, suspended, or removed due to fraud;
Number of advertisers suspended; Number of user fraud complaints; System
improvements made; and the Office of the Attorney General must publish
an annual public summary of platform compliance.
Adds § 699-d for enforcement, penalties, and private right of action.
Violations constitute deceptive acts under GBL § 349. The New York State
Office of the Attorney General may seek injunctions, restitution, and
civil penalties; Penalties up to $5,000 per fraudulent ad, or $10,000
for willful, repeated, or reckless violations; Creates a private right
of action for individuals harmed by a platform's knowing or negligent
failure to comply, allowing recovery of actual damages, statutory
damages, injunctive relief, and attorney's fees; Provides a limited
defense for platforms that demonstrate a reasonable vetting process and
prompt removal efforts (not applicable to restitution).
Section 3 Invalidation of any part does not affect the remainder.
Section 4 establishes the effective date of 180 days after becoming a
law.
 
JUSTIFICATION:
Fraudulent digital advertising has become one of the fastest-growing
consumer threats, with bad actors exploiting social-media platforms to
target vulnerable individuals with scams, counterfeit products, fake
investment schemes, illegitimate health claims, and deceptive commercial
offers. Seniors, minors, individuals with limited technological litera-
cy, and financially vulnerable New Yorkers are disproportionately
harmed.
Although New York's General Business Law § 349 prohibits deceptive acts
and practices, it does not impose affirmative duties on digital plat-
forms to verify advertisers or screen advertisements before publication.
Social-media companies, which profit heavily from paid advertising,
function as major conduits for fraudulent content yet lack standardized
or transparent fraud-prevention systems.
This legislation establishes clear, reasonable obligations tailored to
the modern digital advertising ecosystem. By requiring advertiser iden-
tity verification, pre-publication vetting, rapid removal of fraudulent
ads, record-keeping, and state reporting, the bill creates guardrails
that significantly reduce consumer exposure to fraud while holding plat-
forms accountable for foreseeable harms.
 
LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPLICATIONS:
Minimal direct fiscal impact to the state. Platforms bear compliance
costs. Some resource needs may arise within the Office of the Attorney
General to process quarterly reports, publish annual summaries, and
enforce violations.
 
EFFECTIVE DATE:
This act takes effect 180 days after becoming law.