Bill > HR7548

This bill, known as the Safeguarding Consumers from Advertising Misconduct Act or SCAM Act, aims to prevent online platforms from displaying fraudulent or deceptive commercial advertisements by holding them accountable if they accept payment for such ads and fail to take reasonable steps to prevent them. "Online platform" is defined broadly to include websites, apps, and services that host user-generated content like social media. The bill mandates that these platforms implement procedures to verify advertisers' identities and locations, detect impersonations, use systems to identify fraudulent ads, and provide a clear way for users to report suspicious advertisements. If a fraudulent ad is reported or detected, the platform must investigate within 72 hours and remove it within 24 hours of determining it violates the Act, while also notifying the reporter of the outcome. The Federal Trade Commission (FTC), referred to as the "Commission," will create regulations to implement these requirements and enforce the Act, treating violations as unfair or deceptive practices. States can also bring civil actions on behalf of their residents, and individuals who are harmed can sue online platforms directly for damages and other relief, with the possibility of tripled damages for willful violations. Importantly, this bill clarifies that Section 230 of the Communications Act of 1934, which generally shields online platforms from liability for user-generated content, will not apply to violations of this new Act, though protections under Section 230(c)(2) remain unaffected. The FTC is also required to report on the prevalence of online scams and assess if further legal authority is needed to combat them.

Business and Industry

https://www.congress.gov/bill/119th-congress/house-bill/7548/all-info