SAN FRANCISCO, USA – Final yr, Meta needed to reckon with an unsightly conclusion about its Chinese language promoting clients: They have been defrauding Fb, Instagram and WhatsApp customers worldwide.
Although China’s authoritarian authorities bans use of Meta social media by its residents, Beijing lets Chinese language corporations promote to international shoppers on the globe-spanning platforms. Because of this, Meta’s promoting enterprise was thriving in China, finally reaching over $18 billion in annual gross sales in 2024, greater than a tenth of the corporate’s international income.
However Meta calculated that about 19% of that cash — greater than $3 billion — was coming from adverts for scams, unlawful playing, pornography and different banned content material, in keeping with inner Meta paperwork reviewed by Reuters.
The paperwork are a part of a cache of beforehand unreported materials generated over the previous 4 years by groups together with Meta’s finance, lobbying, engineering and security divisions. The cache reveals Meta’s efforts over that interval to grasp the size of abuse on its platforms and the corporate’s reluctance to introduce fixes that would undermine its enterprise and revenues.
The paperwork present that Meta believed China was the nation of origin of roughly 1 / 4 of all adverts for scams and banned merchandise on Meta’s platforms worldwide. Victims ranged from consumers in Taiwan who bought bogus well being dietary supplements to buyers in the USA and Canada who have been swindled out of their financial savings. “We have to make vital funding to cut back rising hurt,” Meta staffers warned in an inner April 2024 presentation to leaders of its security operations.
To that finish, Meta created an anti-fraud crew that went past earlier efforts to observe scams and different banned exercise from China. Utilizing a wide range of stepped-up enforcement instruments, it slashed the problematic adverts by about half through the second half of 2024 — from 19% to 9% of the overall promoting income coming from China.
Then Meta Chief Government Mark Zuckerberg weighed in.
“Because of Integrity Technique pivot and follow-up from Zuck,” a late 2024 doc notes, the China ads-enforcement crew was “requested to pause” its work. Reuters was unable to study the specifics of the CEO’s involvement or what the so-called “Integrity Technique pivot” entailed.
However after Zuckerberg’s enter, the paperwork present, Meta disbanded its China-focused anti-scam crew. It additionally lifted a freeze it had launched on granting new Chinese language advert businesses entry to its platforms. One doc exhibits that Meta shelved but different anti-scam measures that inner checks had indicated could be efficient. The doc didn’t element the specifics of these measures.
Meta took these steps whilst an outdoor marketing consultant it employed produced analysis that warned “Meta’s personal habits and insurance policies” have been fostering systemic corruption within the Chinese language marketplace for adverts concentrating on customers in different nations, further paperwork present.
The upshot: Inside a number of months of Meta’s temporary crackdown, a brand new crop of Chinese language promoting businesses was flooding Fb and Instagram with prohibited adverts. By mid-2025, banned adverts climbed again to about 16% of Meta’s China income.
Rob Leathern, who was a senior director of product administration at Fb till 2020 and is not on the firm, stated the size of predatory promoting revealed within the paperwork represents a significant breakdown in shopper protections on the social media big.
“The degrees that you just’re speaking about aren’t defensible,” he stated of the proportion of abusive adverts. “I don’t understand how anybody may assume that is okay.”
In a press release to Reuters, Meta spokesperson Andy Stone stated the work of the particular crew dedicated to preventing Chinese language fraud was all the time meant to be momentary. He later added that Zuckerberg didn’t order the crew’s disbanding. Zuckerberg’s order to groups engaged on scams and different high-risk harms, he stated, “was to redouble efforts to cut back all of them throughout the globe, together with in China.”
As a part of its regular enforcement processes, Stone stated, Meta’s automated techniques over the previous 18 months have blocked or eliminated 46 million adverts submitted via its Chinese language enterprise companions, often earlier than customers noticed them. Stone stated Meta has severed relationships with unspecified Chinese language businesses over misbehavior previously and that the corporate docks commissions for Chinese language companions that run too many violating adverts.
“Scams are spiking throughout the web, pushed by persistent criminals and complex, organized crime syndicates always evolving their schemes to evade detection,” Stone wrote. “We’re targeted on rooting them out by utilizing superior technical measures and new instruments, disrupting felony rip-off networks, working with trade companions and regulation enforcement, and elevating consciousness on our platforms.”
The assertion didn’t deal with lots of the questions Reuters requested Meta in regards to the paperwork, the coverage discussions mirrored in them, or the enterprise selections the corporate took in consequence.
The revelations about Meta’s China enterprise come at a time when the social media big is already beneath fireplace for failing to curtail a deluge of promoting that promotes fraud and banned items.
Reuters reported final month that Meta earns $7 billion a yr simply from the portion of rip-off adverts it considers “excessive threat,” and that 10% of the corporate’s 2024 income – about $16 billion – was projected to return from adverts for scams, unlawful playing and banned merchandise. Following the story, two US senators referred to as on the Securities and Change Fee and the Federal Commerce Fee to look into the matter and “pursue vigorous enforcement motion the place acceptable.”
Nowhere are the tradeoffs Meta makes between defending its customers and defending its income clearer than in China, a market not like every other the corporate operates in. Meta employees within the inner paperwork characterize China as the corporate’s high “Rip-off Exporting Nation” and establish the nation as the one largest supply for a surge in fraud on its platforms.
The Chinese language authorities didn’t reply to detailed questions despatched by Reuters for this report back to places of work together with the commerce, international and public-security ministries and its businesses for market and our on-line world administration.
China is so central to Meta’s rip-off downside that the corporate believes its nationwide holidays have an effect on the extent of fraud on Fb and Instagram globally: Through the “Golden Week” vacation in October, when a whole lot of thousands and thousands of Chinese language residents journey, the speed of scams on Meta’s platforms declines worldwide, one doc notes.
The hurt inflicted on shoppers by the tech big’s Chinese language advertisers might be immense: In March 2025, federal prosecutors in Illinois stated that the US Federal Bureau of Investigation seized $214 million in proceeds from the promoters of 1 fraud that used Fb and Instagram adverts to lure victims right into a Chinese language inventory rip-off.
When customers clicked on the adverts, they have been routed into WhatsApp teams run by “people in China posing as U.S.-based funding advisors,” stated the prosecutors in a press release. These “advisers” finally steered the victims into buying inventory at vastly inflated costs, they stated.
The prosecutors charged seven folks from Taiwan and Malaysia, nonetheless believed to be at massive overseas, with wire fraud and securities fraud. The FBI declined to supply further particulars on the case, and the Division of Justice didn’t reply to a request for remark.
Stone, the Meta spokesperson, instructed Reuters the corporate cooperated with regulation enforcement and eliminated 1000’s of accounts concerned within the scheme.
‘Little or no threat’ for fraudsters
In China, Meta sells most of its adverts via 11 main Chinese language advert company companions, known as “high tier resellers.” These huge gamers each promote adverts and recruit smaller promoting businesses, most however not all based mostly in China, to buy Fb and Instagram adverts via their techniques. The Meta spokesperson instructed Reuters that firm coverage forbids Chinese language companions from working with advert businesses or advertisers exterior of China. Meta will examine cases of such conduct that Reuters raised on this report, he added.
The second-tier businesses, in the meantime, work with an ever-changing roster of advertisers who aren’t interacting immediately with the large businesses or Meta itself. Because of this advanced set-up, an opaque system of intermediaries exists.
The system is susceptible to facilitating ads for scams, unlawful playing and banned items, in keeping with inner paperwork, former staffers and an in depth report performed for Meta by Propellerfish, the London-based consultants who warned that the corporate’s personal habits was encouraging fraud. Meta employed the consultancy final yr to check why its enterprise in China was producing a lot banned promoting.
Propellerfish didn’t reply to requests for remark for this story.
To position an advert on Fb or Instagram, an advertiser should set up a consumer account, which requires little greater than a reputation and a birthdate. However pretend or stolen accounts are widespread, the Propellerfish report discovered, making it simple for fraudulent advertisers to disguise themselves.
Chinese language expertise corporations additionally promote instruments that obscure advertisers’ true identities and disguise fraudulent adverts as innocuous, the report stated. And synthetic intelligence instruments are used to generate pretend paperwork, in case Meta makes an attempt to confirm the advertiser.
Compounding the phenomenon is a complete trade of “advert optimization specialists” that exploit weaknesses in Meta’s enforcement techniques and create adverts for scams and banned items, the report stated. The shady promoting campaigns these specialists managed have been typically funded by “casual” sources, together with mortgage sharks. The report didn’t cite any of those sources by title.
As a result of the dangerous promoting doesn’t goal Chinese language residents, the Propellerfish consultants concluded, China’s authorities usually turns a blind eye. “The Chinese language authorities doesn’t intrude when violations goal abroad audiences,” the report famous. Crooked home advertisers, subsequently, face “little or no threat.” Chinese language authorities didn’t reply to questions in regards to the Propellerfish evaluation.
Different social media platforms promote adverts in China through related networks of advert company companions. However in contrast with its chief opponents for internet advertising income, Meta has been extra tolerant of illicit practices in China, Propellerfish discovered. “Enforcement is seen as inconsistent” by would-be abusers, the report stated. TikTok was “stricter,” it continued, and Google required thorough identification checks.
Google and TikTok didn’t reply to requests for remark.
Nonetheless, Meta considers its method with Chinese language advertisers to be acceptable, paperwork present.
In a single February 2025 doc, it famous the “adversarial” nature of the Chinese language market, the place some advertisers are targeted on fast earnings, not regular enterprise or brand-building. Unspecified “cultural elements,” the doc added, destigmatize unethical enterprise practices concentrating on foreigners.
In the identical February doc, Meta managers stated the corporate would tolerate elevated ranges of misconduct by Chinese language advertisers on a everlasting foundation. Somewhat than search “parity” between the standard of Chinese language adverts and the remainder of the world – a goal it appeared near reaching throughout its temporary battle in opposition to fraudsters final yr – it will protect the established order, merely aiming to “preserve the % of world hurt” from China.
After this story was revealed, Stone stated that dropping Meta’s efforts to deliver downside Chinese language advert charges consistent with the remainder of the world was a choice made within the context of efforts to focus sources on the highest-risk harms to customers worldwide.
Scammers ‘accomplish their goals’
After China blocked its residents from accessing main Western social media platforms in 2009, Meta spent years making an attempt to get again into the nation, house to a billion-plus potential customers of Fb, Instagram and WhatsApp.
As a part of a appeal offensive, Zuckerberg visited China, studied Mandarin, and met Chinese language President Xi Jinping, in keeping with information studies on the time. Meta and Chinese language officers didn’t reply to questions on Zuckerberg’s outreach to Xi.
Much less publicly, Meta constructed a secret system that might have given the Chinese language authorities the power to immediately reasonable Chinese language customers’ content material if Meta received permission to reenter the market, in keeping with a 2016 New York Instances report and an inner firm doc from that interval seen by Reuters.
None of those efforts labored.
China’s authorities, nonetheless, didn’t block mainland companies from operating adverts that focus on social media customers exterior the nation. That promoting ultimately would assist Chinese language corporations attain thousands and thousands of patrons all over the world.
China now represents 11% of Meta’s general income.
A part of Meta’s success there was pushed by Shein and Temu, retail powerhouses that promote direct to shoppers worldwide and that aren’t the supply of Meta’s fraud downside, in keeping with the interior paperwork. These two Chinese language corporations, paperwork from July 2024 present, have been Meta’s largest advertisers wherever, spending on common a mixed $17 million on Fb and Instagram each day. Amazon, which spent $4.8 million day by day, was third.
Shein, Temu, and Amazon didn’t reply to requests for remark.
The fraud, the paperwork stated, comes often from small and medium-sized Chinese language companies recruited by Meta’s advert company companions.
In many of the world, advertisers on Fb and Instagram purchase adverts via a enterprise profile that’s linked to advertisers’ accounts and associated pages they management. However as a result of companies can’t readily entry the platforms in China, Meta pays the 11 massive Chinese language advert businesses – often called resellers – to enlist advertisers and run adverts for them on so-called “company accounts.”
Meta pays a roughly 10% fee to businesses for adverts bought via these accounts and grants them particular protections. As an illustration, beneath a system often called “whitelisting” or “mistake prevention,” Meta doesn’t instantly take away adverts bought through top-tier businesses after they’re flagged by automated techniques for breaking Meta’s promoting guidelines, inner paperwork say. Such guidelines ban the promoting of scams, unlawful items and companies, and sure different merchandise comparable to intercourse toys.
As an alternative, suspect adverts stay lively as they bear a secondary assessment by a human. If Meta’s staffers are busy, which may take days – or by no means occur in any respect. And within the meantime, Meta continues to indicate the adverts.
“Sadly the added time for secondary assessment is satisfactory for scammers to perform their goals by gaining huge impressions,” one doc says.
A few of Meta’s Chinese language companions overtly promote their skill to defend purchasers from Meta enforcement. “80% decrease likelihood of suspension than different common brokers,” guarantees the web site of Yinolink, considered one of Meta’s official Chinese language companions.
Yinolink didn’t reply to a request for remark.
Meta additionally permits its Chinese language companions to share their accounts with smaller advert businesses, identified to the corporate as “second-tier” resellers. The apply provides Meta even much less data of the events with whom it’s doing enterprise, inner paperwork present, be it the lower-level advert businesses or the purchasers shopping for the adverts.
As such, the system is inconceivable for Meta to carefully police, Propellerfish’s evaluation of the Chinese language market decided. “Buying accounts is trivially simple,” it stated.
“Violation or not,” one advert optimization specialist instructed a Propellerfish marketing consultant, “it doesn’t make a lot distinction for us.” The report didn’t establish the specialist or the marketing consultant, who was posing on behalf of Propellerfish as a thriller shopper.
To find out how rip-off adverts might be bought on Fb or Instagram utilizing a Chinese language company, a U.S.-based Reuters reporter positioned adverts via intermediaries working with Meta’s high Chinese language companions. The intermediaries have been second-tier businesses, a few of whom Meta additionally licensed as “Badged Companions,” described in an official listing on its web site as “trusted consultants.” A few of these lower-level companions overtly boasted about their skill to run banned adverts on Meta’s platforms.
Two of the businesses Reuters positioned adverts with have been based mostly exterior China. In textual content chats, the reporter overtly acknowledged his curiosity in operating banned adverts on the time of buy and obtained no resistance from the resellers. It price $30 or much less — paid through cryptocurrency — to arrange every account. (See associated story on how we did this.)
The advert accounts managed by these lower-level advert businesses got here from a few of Meta’s main Chinese language companions, together with GatherOne and Cheetah Cell. Reuters then used the subleased accounts to put adverts touting investments with unrealistic charges of return – a take a look at of Meta’s insurance policies in opposition to get-rich-quick schemes. The adverts ran unimpeded and prompted curiosity from dozens of Fb customers. Reuters knowledgeable the customers the adverts had been a journalistic take a look at.
Cheetah Cell and GatherOne didn’t reply to requests for remark.
Shortly earlier than publication of this report, Meta deleted its Badged Companion listing from its web site. “We’re reviewing this system,” Stone stated, including that the corporate would examine how official Chinese language company accounts ended up within the palms of non-Chinese language corporations.
‘We’re seeing hurt’
Between 2022 and 2024, Meta’s Chinese language advert income greater than doubled, from $7.4 billion to $18.4 billion, in keeping with the corporate’s public monetary statements. Because the enterprise soared, it grew more and more obvious inside the corporate that fraudulent practices have been widespread in China, the interior paperwork present.
In 2023, as a part of an earlier effort to deal with fraud, Meta stopped verifying new Chinese language advert company companions due to the “excessive hurt” these intermediaries have been inflicting, one doc says. However Meta lifted the moratorium after its 2024 “pivot” to be able to “unlock” income.
By late 2024, lower-tier Chinese language advert businesses have been as soon as once more having access to verified accounts on Meta’s platforms. Of the annualized $240 million in promoting from newly verified resellers that yr, half violated Meta’s security guidelines, Meta decided. “We’re seeing hurt from these newly verified businesses,” the doc says.
Staffers responded by making a dashboard to trace the newly verified companions and began holding “weekly monitoring classes to assessment and deal with problematic businesses.” As a result of excessive charges of misconduct, Stone stated, Meta reimposed its moratorium on verifying new Chinese language company companions in late 2024.
One high Chinese language advertiser illustrates the holes in Meta’s vetting course of.
Final yr, in keeping with one doc, Meta discovered that greater than half the adverts run by an advertiser referred to as Beijing Tengze Know-how Co Ltd broke Meta’s guidelines in opposition to misleading practices. The paperwork don’t element the services or products that Beijing Tengze was promoting. However the firm was on an inner checklist of Meta’s high 200 advertisers worldwide, in the identical league as manufacturers comparable to American Specific, BMW and Chanel.
Nonetheless, Meta didn’t cease doing enterprise with Beijing Tengze, inner paperwork present. As an alternative, Meta began charging the corporate extra to promote. The measure adopted a Meta coverage that seeks to discourage fraudsters by making them pay a “penalty.”
Meta instructed Reuters it later minimize ties with Beijing Tengze. It didn’t specify when. Chinese language enterprise data present the corporate shut down early this yr. A go to by the information company to what had been its listed deal with led to a residential avenue in a mountain city practically two hours from Beijing. The deal with, given because the headquarters of considered one of Meta’s high advertisers, turned out to not exist.
Enterprise data present the bulk proprietor of Beijing Tengze was a person named Lin Zedun. Lin additionally controls a number of different corporations, together with Shenzhen Fugaoda Know-how Co Ltd, that state they promote on Fb and Instagram.
Shenzhen Fugaoda is listed as an lively enterprise in Chinese language registry data. However a go to by Reuters to the official deal with of that firm’s headquarters in Shenzhen, in southeast China, led to an empty workplace with trash on the ground. The constructing’s superintendent instructed Reuters the corporate, after lacking hire funds, abruptly vacated the workplace within the spring of 2024.
Reuters couldn’t decide the place the corporate went. Lin, the corporate proprietor, didn’t reply to a request by e mail for remark.
A number of months after leaving its headquarters, Shenzhen Fuguoda was once more lively, posting adverts on a Chinese language job web site to rent specialists in social media promoting and e-commerce. “Precedence will probably be given to these with expertise in distributing small black items in Europe and America,” the advert stated, utilizing frequent Mandarin slang for black-market merchandise.
Early this yr, as a part of its effort to keep up the extent of fraud it had deemed tolerable, Meta started adjusting the commissions it paid to Chinese language advert businesses, a doc states. The brand new funds are supposed to account for the standard of adverts the businesses place: If they create too many scams or false advertisers, Meta pays them much less.
The change doesn’t seem to have altered many businesses’ ways.
In Could, for instance, Meta staffers sampled Chinese language adverts amid a spike in violations on the platform, one doc exhibits. They discovered {that a} assortment of 800 promoting accounts within the earlier month alone had generated $28 million in adverts that violated Meta’s guidelines.
The samples, the Could 2025 doc states, included scams, “misleading enterprise practices,” and adverts that violated Meta’s prohibitions in opposition to advertising for unlawful on-line casinos, sexual content material, weapons and animal abuse.
Greater than 75% of the spending got here from accounts having fun with Meta’s associate protections, the doc exhibits. In response to that discovering, one staffer requested colleagues if Meta meant to punish the big-spending Chinese language promoting companions who managed the accounts.
No, one other stated, as a result of “the income impression is just too excessive.” As an alternative, Meta’s enforcement crew proposed shutting down a small portion of the accounts that human evaluations had discovered to be overwhelmingly operating banned adverts.
These accounts, in keeping with the doc, represented simply $2.8 million of the dangerous adverts Meta was receiving from the accounts every month. Nonetheless, earlier than shutting the accounts down, the protection staffers wished to verify that colleagues specializing in advert development wouldn’t object, “given the income impression.”
The Meta spokesperson instructed Reuters the precise numbers cited within the doc weren’t closing and that enforcement resulted in lots of dozens of eliminated accounts. He didn’t present new figures.
The closure of these accounts may assist Meta deal with the present spike in fraud and banned adverts, the doc stated, but it surely wasn’t more likely to change any habits long-term. Advertisers, it famous, may quickly reroute their adverts via accounts that Meta hadn’t shut down.
“It’s possible the income will return,” the doc concluded. – Rappler.com
