[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7548 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 7548
To prohibit online platforms from displaying fraudulent or deceptive
commercial advertisements, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 12, 2026
Mr. Meuser (for himself and Mr. Correa) introduced the following bill;
which was referred to the Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To prohibit online platforms from displaying fraudulent or deceptive
commercial advertisements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Safeguarding Consumers from
Advertising Misconduct Act'' or the ``SCAM Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Online platforms have become a primary conduit for
online scams or other digital advertising-related fraud,
including fake giveaways, animal sales, deal advertisements
tied to nonexistent products, government impersonations,
romance scams, health scams, and impersonations using AI-cloned
voices and stolen images targeting legitimate businesses.
(2) According to data reported by the Federal Trade
Commission, social media platforms are a primary contact method
to initiate scams, with individuals ages 20 to 29 reporting
social media was the contact method more than 38 percent of the
time, and for individuals ages 18 to 19, that figure was 47
percent.
(3) According to the Commission, the estimated overall loss
from fraud in 2024, adjusted to account for underreporting, was
$195,900,000,000, with an estimated $81,500,000,000 lost by
older adults.
(4) According to the AARP, consumers filed 2,600,000 fraud
reports in 2023, with a median individual loss of $500. Nearly
100,000 consumers reported losses of $10,000 or more.
(5) Some online platforms have abandoned tighter advertiser
verification processes to avoid driving away profits from
advertisers.
(6) Section 230 of the Communications Act of 1934 (47
U.S.C. 230) was enacted to protect online platforms acting as
``Good Samaritans'' by shielding such platforms from being
treated as publishers of user content, while encouraging such
platforms to block or screen offensive content.
(7) Courts have interpreted Section 230 too broadly,
granting sweeping immunity even to online platforms alleged to
facilitate unlawful or harmful activity and including online
activities that did not exist in 1996--an outcome contrary to
Congress's original intent.
(8) According to the Federal Trade Commission's consumer
alert titled ``Top scams of 2024'' (March 10, 2025), ``People
reported losing money more often when contacted through social
media. Most people (70 percent) reported a loss when contacted
on a social media platform--and lost more money overall.'' The
Commission issued broad information requests to online
platforms using the Commission's authority under section 6(b)
of the Federal Trade Commission Act (15 U.S.C. 46(b)) in order
to assess paid advertisement screening practices, citing the
surge in scam ads.
(9) Online platforms' inconsistent and optional efforts to
mitigate the rise in scams have failed, leading to a consumer
confidence crisis across digital financial systems.
SEC. 3. PROHIBITION ON DIGITAL ADVERTISING-RELATED FRAUD.
(a) In General.--It shall be unlawful for an online platform to
display a fraudulent or deceptive commercial advertisement on such
platform if the online platform--
(1) accepted payment to display such advertisement; and
(2) failed to take reasonable steps (as described in
subsection (b)) to prevent the fraudulent or deceptive
commercial advertisement from being made available.
(b) Additional Requirements for Online Platforms.--
(1) Required procedures.--An online platform that accepts
payment, or any other form of compensation, to display an
advertisement shall establish and implement procedures to
require the following:
(A) Procedures to verify the identity of each
advertiser prior to the placement of a paid
advertisement, including--
(i) verification of the legal name and
physical location of the advertiser;
(ii) verification of a valid and current
government-issued identification of the
advertiser, or, in the case of a business
entity, documentation establishing the legal
existence of the entity and the relation of the
purchaser to the entity;
(iii) collection of contact information for
the advertiser sufficient to allow follow up by
the online platform or the Commission; and
(iv) reasonable measures to prevent
circumvention of such verification requirements
through the use of any false, stolen, or
synthetic identity.
(B) An active impersonation detection and
mitigation program.
(C) Automated and manual fraudulent and deceptive
commercial advertisement detection systems.
(D) A clear and conspicuous tool for users to
report suspected fraudulent or deceptive commercial
advertisements.
(2) Investigation of fraudulent or deceptive commercial
advertisements.--
(A) In general.--If a person (including a
government entity) reports a fraudulent or deceptive
commercial advertisement or the detection system of an
online platform identifies a fraudulent or deceptive
commercial advertisement, the online platform shall--
(i) not later than 72 hours after the
submission of such report or receiving such
identification, conduct an investigation of
such advertisement; and
(ii) not later than 24 hours after
concluding the investigation, if applicable,
notify the person of the outcome of such
investigation.
(B) Removal.--
(i) After investigation.--If, after
conducting an investigation under subparagraph
(A), an online platform determines that an
advertisement violates the requirements of this
Act, such online platform shall, not later than
24 hours after making such determination,
remove the advertisement from the platform.
(ii) During investigation.--Nothing in this
subparagraph shall preclude an online platform
from removing an advertisement prior to the
conclusion of an investigation under
subparagraph (A), as determined appropriate by
the online platform.
(3) Presumed compliance.--
(A) In general.--For purposes of subsection (a), an
online platform shall be presumed to have taken
reasonable steps to prevent a fraudulent or deceptive
commercial advertisement from being made available if
the online platform--
(i) submits to the Commission a fraudulent
and deceptive commercial advertisement
detection program that incorporates the
procedures described in paragraph (1), and the
Commission approves such program; and
(ii) demonstrates compliance with, and
active enforcement of, the program described in
clause (i), including by demonstrating that the
online platform provides adequate resources for
the program.
(B) Rule of construction.--Nothing in this
paragraph shall be construed to create a presumption of
compliance in any individual enforcement action in
which the Commission determines or establishes that the
online platform did not comply with its fraudulent and
deceptive commercial advertisement detection program.
(c) Regulations.--
(1) In general.--Not later than 1 year after the date of
enactment of this section, the Commission shall promulgate
regulations in accordance with section 553 of title 5, United
States Code, to implement this section.
(2) Updates.--The Commission shall review the regulations
promulgated under paragraph (1) on an annual basis and revise
such regulations as appropriate.
(d) Enforcement by the Commission.--
(1) Unfair or deceptive acts or practices.--A violation of
this Act or a regulation promulgated under this Act shall be
treated as a violation of a rule defining an unfair or
deceptive act or practice prescribed under section 18(a)(1)(B)
of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(2) Powers of the commission.--
(A) In general.--The Commission shall enforce this
Act and any regulation promulgated under this Act in
the same manner, by the same means, and with the same
jurisdiction, powers, and duties as though all
applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated
into and made a part of this Act.
(B) Privileges and immunities.--Any person who
violates this Act or any regulation promulgated under
this Act shall be subject to the penalties and entitled
to the privileges and immunities provided in the
Federal Trade Commission Act (15 U.S.C. 41 et seq.).
(C) Authority preserved.--Nothing in this Act shall
be construed to limit the authority of the Commission
under any other provision of law.
(e) Enforcement by States.--
(1) Authorization.--In any case in which the attorney
general of a State has reason to believe that an interest of
the residents of the State has been or is threatened or
adversely affected by the engagement of any person in an act or
practice that violates subsection (a) or (b), the attorney
general of the State may, as parens patriae, bring a civil
action on behalf of the residents of the State in a district
court of the United States of appropriate jurisdiction to--
(A) enjoin such act or practice;
(B) enforce compliance with subsection (a) or (b);
(C) obtain damages, restitution, or other
compensation on behalf of residents of the State; or
(D) obtain such other relief as the court may
consider to be appropriate.
(2) Rights of the commission.--
(A) Notice to the commission.--
(i) In general.--Except as provided in
clause (iii), before initiating a civil action
under paragraph (1), the attorney general of a
State shall notify the Commission in writing
that the attorney general intends to bring such
civil action.
(ii) Contents.--The notification required
by clause (i) shall include a copy of the
complaint to be filed to initiate the civil
action.
(iii) Exception.--If it is not feasible for
the attorney general of a State to provide the
notification required by clause (i) before
initiating a civil action under paragraph (1),
the attorney general shall notify the
Commission immediately upon instituting the
civil action.
(B) Intervention by the commission.--Upon receiving
the notice required by subparagraph (A)(i), the
Commission may intervene in the civil action and, upon
intervening--
(i) be heard on all matters arising in the
civil action; and
(ii) file petitions for appeal of a
decision in the civil action.
(3) Investigatory powers.--Nothing in this subsection may
be construed to prevent the attorney general of a State from
exercising the powers conferred on the attorney general by the
laws of the State to conduct investigations, to administer
oaths or affirmations, or to compel the attendance of witnesses
or the production of documentary or other evidence.
(4) Preemptive action by the commission.--If the Commission
has instituted a civil action for a violation of subsection (a)
or (b), no State officer may bring an action under paragraph
(1) during the pendency of that action against any defendant
named in the complaint of the Commission for any violation of
subsection (a) or (b) alleged in the complaint.
(5) Venue; service of process.--
(A) Venue.--Any action brought under paragraph (1)
may be brought in the district court of the United
States that meets applicable requirements relating to
venue under section 1391 of title 28, United States
Code.
(B) Service of process.--In an action brought under
paragraph (1), process may be served in any district in
which the defendant--
(i) is an inhabitant; or
(ii) may be found.
(f) Private Right of Action.--
(1) In general.--A person who has been injured by another
person in violation of subsection (a) or (b) may bring a civil
action against such person in an appropriate district court of
the United States--
(A) seeking injunctive relief;
(B) subject to paragraph (2), to obtain actual
damages; and
(C) to obtain, for each violation, any other
restitution, penalties, and other legal or equitable
relief as the court may deem just and proper.
(2) Willful or knowing violations.--If the court finds that
the defendant acted willfully or knowingly in committing a
violation described in paragraph (1), the court may, in its
discretion, increase the amount of the award to an amount equal
to not more than 3 times the amount available under paragraph
(1)(B).
(3) Costs and attorney's fees.--The court shall award to a
prevailing plaintiff in an action under this subsection the
litigation costs of such action and reasonable attorney's fees,
as determined by the court.
(4) Limitation.--An action may be commenced under this
subsection not later than 5 years after the date on which the
person first discovered or had a reasonable opportunity to
discover the violation.
(5) Nonexclusive remedy.--Bringing a civil action under
this subsection shall be in addition to any other remedy
available to the person bringing such civil action.
(g) Relationship to Other Laws.--
(1) Effect of other laws.--
(A) Application of section 230(c)(1).--Section
230(c)(1) of the Communications Act of 1934 (47 U.S.C.
230(c)(1)) shall not apply to any violation of this
section.
(B) Application of section 230(c)(2).--Nothing in
this Act shall be construed to limit or affect the
civil liability protections under section 230(c)(2) of
the Communications Act of 1934 (47 U.S.C. 230(c)(2)).
(2) Effect on state laws.--Nothing in this section or any
regulation promulgated under this section shall preempt or
otherwise affect any State or local law.
(3) Severability.--If any provision of this section, or the
application thereof to any person or circumstance, is held
invalid, the remainder of this section and the application of
such provision to other persons not similarly situated or to
other circumstances shall not be affected by the invalidation.
SEC. 4. REGULATORY REPORT ON ONLINE SCAMS AND POTENTIAL FOR ADDITIONAL
RULEMAKING.
(a) Report Required.--Not later than 9 months after the date of
enactment of this section, the Commission, in consultation with other
Federal agencies, shall submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services
of the House of Representatives a report assessing whether additional
statutory authority is needed to prevent the proliferation of online
scams involving financial transactions.
(b) Contents.--The report required under subsection (a) shall
include--
(1) an assessment of any regulatory gaps that allow online
scams involving fraudulent advertisements or digital payment
fraud to persist;
(2) an analysis of whether improved information-sharing
mechanisms between online platforms, financial institutions,
and regulators could reduce consumer losses; and
(3) recommendations for such legislation and administrative
action required to strengthen oversight of online platforms or
intermediaries facilitating scam-related payments.
SEC. 5. DEFINITIONS.
For purposes of this Act:
(1) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(2) Deceptive.--The term ``deceptive''--
(A) has the meaning given the term in section 5