ALBANY, N.Y. (NEXSTAR) — New Yorkers lose about $6.5 billion every year to online scams, according to the Consumer Federation of America, and state lawmakers have floated legislation that’s supposed to hold social media companies accountable and protect consumers. The proposed Fraudulent Social Media Advertising Prevention Act, S8605/A11066, would make platforms verify advertisers and vet commercial posts before publishing.
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Democratic State Senators Leroy Comrie and Andrew Gounardes joined consumer advocates at the State Capitol on Wednesday to push for the legislation ahead of National Scam Survivor Day on Thursday. In the video above, Gounardes justified the need for legislation.
It would categorize social media scams as deceptive practices under the state’s General Business Law. Platforms would have to collect government-issued identification and valid physical addresses from individual advertisers—or business registration and tax documents from corporate ones—before approving and hosting that content.
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Comrie and Democratic Assemblymember Clyde Vanel sponsor the bill, which would fine platforms up to $5,000 per fraudulent ad, or $10,000 for repeated violations or not removing known scams.
The state attorney general’s office would also have the power to sue platforms that break the law for injunctions and fines or repayment for hoodwinked New Yorkers. The bill would also create a private right of action, meaning individual New Yorkers could sue platforms for damages directly.
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Platforms could defend against those civil penalties by proving that they use a reasonable, good-faith vetting process and act promptly to remove fraud when discovered. They’d still be liable for any restitution owed to a victim…