SCAM Act
Sponsored By: Senator Gallego, Ruben [D-AZ]
Introduced
Summary
Holds platforms responsible for paid deceptive ads unless they take reasonable steps to stop them. The bill forces online platforms to verify advertisers, run automated and manual detection, follow strict timelines for investigating and removing suspect ads, and opens multiple routes for enforcement and private lawsuits.
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- Consumers and families gain stronger protection from ads that make material misrepresentations likely to cause financial harm and can sue for actual damages with treble damages for willful violations and a 5-year statute of limitations.
- Online platforms that accept payment must verify advertiser identity, keep contact information, run impersonation detection, investigate reports within 72 hours, and remove violating ads within 24 hours after a violation finding; platforms that submit an FTC‑approved program are presumed compliant.
- Advertisers must provide legal name, physical location, government ID or business documents, and take steps to prevent verification circumvention.
- Enforcement is led by the Federal Trade Commission treating violations as unfair or deceptive acts, state attorneys general can bring parens patriae actions after notice, and injured private parties have a defined private right of action; the Commission must issue implementing regulations within 1 year and deliver a regulatory report within 9 months.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
FTC rulemaking and platform liability
If enacted, the Federal Trade Commission would write rules to implement the bill within 1 year. The Commission would review and update those rules each year. Violations would be treated as unlawful under the FTC Act so the Commission could use its full enforcement powers. Section 230(c)(1) immunity would not apply to violations, but 230(c)(2) protections would remain. The bill would not override state or local law and would include a severability clause.
Platforms must screen paid online ads
If enacted, online platforms that accept payment would need to verify advertisers before paid ads run. Verification would include legal name, physical location, a current government ID or business paperwork, and contact information. Platforms would run automated and manual impersonation detection, offer a clear report tool, and investigate reports within 72 hours. If an ad violates the bill, platforms would remove it within 24 hours after finding a violation. The bill would narrow "deceptive" to practices likely to cause financial harm and define covered online platforms.
New lawsuits for scam victims
If enacted, any person harmed by a covered ad would be able to sue in federal court. Courts could award actual damages and issue injunctions or other equitable relief. For willful or knowing violations, courts could treble damages up to three times actual damages. A prevailing plaintiff would be entitled to litigation costs and reasonable attorney fees. Actions would start within 5 years after a person discovered or should have discovered the violation. State attorneys general could also sue on behalf of residents after notifying the Commission. If the Commission already sued the same defendants, states could not sue those defendants while that action is pending.
Report on online payment scams
If enacted, the FTC would send a report to two congressional committees within 9 months. The report would assess gaps that allow fraudulent ads and payment fraud to continue. It would analyze whether better information sharing among platforms, banks, and regulators would reduce consumer losses. The report would recommend new laws or administrative actions to strengthen oversight.
Sponsors & CoSponsors
Sponsor
Gallego, Ruben [D-AZ]
AZ • D
Cosponsors
Sen. Moreno, Bernie [R-OH]
OH • R
Sponsored 2/4/2026
Peter Welch
VT • D
Sponsored 3/4/2026
Amy Klobuchar
MN • D
Sponsored 3/10/2026
Sen. McCormick, David [R-PA]
PA • R
Sponsored 3/4/2026
Katie Britt
AL • R
Sponsored 3/24/2026
Sen. Coons, Christopher A. [D-DE]
DE • D
Sponsored 4/13/2026
Sen. Graham, Lindsey [R-SC]
SC • R
Sponsored 4/13/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov