Listen: How Big Tech profits from fraud

Thousands of Europeans are losing their savings to fake investment ads on Facebook, TikTok, and Instagram. These scams use AI-generated deepfakes of politicians and celebrities, like Germany’s defence minister Boris Pistorius or Irish presidential candidate Heather Humphreys, to sell get-rich-quick schemes.

All this information is coming to light after a months-long investigation by Investigate Europe, which uncovered how criminal networks are using AI, illegal call centres and social media ads to scam people across the continent.

So how do the scams work and what is Europe doing to prevent them? 

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Long Story Short” hosted by Evi Kiorri. The podcast is available on all major platforms.

You can find the transcript here if you prefer reading:

Thousands of Europeans are losing their savings to fake investment ads on Facebook, TikTok, and Instagram. These scams use AI-generated deepfakes of politicians and celebrities, like Germany’s defence minister Boris Pistorius or Irish presidential candidate Heather Humphreys, to sell get-rich-quick schemes.

Except… neither of them ever said a word of it. The videos are completely fabricated, deepfakes created with advanced voice-cloning software and blasted across social media as paid advertisements. So how do the scams work and what is Europe doing to prevent them?

Now all this information is coming to light after a months-long investigation by Investigate Europe, which uncovered how criminal networks are using AI, illegal call centres and social media ads to scam people across the continent.

Once users click these fake ads, they’re led into a web of manipulation, where smooth-talking “advisors” push them to invest small sums at first, showing fake profits on bogus trading platforms, until, of course, the money vanishes.

Losses can range from a few hundred euros to over a million. Across Europe, citizens are losing an estimated €4bn a year to these scams.

And despite the EU’s Digital Services Act, the landmark law meant to make online platforms accountable, tech giants like Meta are failing to stem the tide. Researchers working as official “trusted flaggers” say they report thousands of illegal ads a month, but many remain online for days, weeks, even months.

Meta, in particular, is under EU investigation for deceptive advertising, yet still profits with billions from personalised ads, including the fraudulent ones.

Now these scams expose a deeper failure of Europe’s digital safety net.

The Digital Services Act was hailed as the law that would finally rein in Big Tech. But in practice, it lets platforms off the hook. They’re not required to proactively monitor content only to act once something is reported. By the time a fake ad is flagged, thousands of people may have already clicked, invested, and lost.

And this isn’t small-time fraud. Europol warns that organised crime groups are now shifting from drugs and weapons to online financial scams because they’re safer, faster, and far more profitable.

At the same time, “trusted flaggers”, those tasked with spotting and reporting harmful content, are unpaid, understaffed, and limited to reporting just 20 URLs per case. Across the whole EU, there are only 46 such teams. That’s supposed to cover 450 million internet users.

All the while, Meta’s ad revenue hit 160 billion dollars last year. It claims its ads “boost the European economy,” but those same ad systems are also enabling a new wave of high-tech fraud.

So, what now?

The European Commission insists the tools are in place, that the DSA can push platforms to act before harm is done. But experts disagree. They argue the law is built to clean up after the mess, not prevent it.

Some countries are taking matters into their own hands. Ireland’s cybercrime unit  says investment fraud is now one of the country’s biggest criminal threats. Google has begun verifying advertisers for financial services in Ireland and, not surprisingly, the scams have migrated… to Meta.

For now, the scammers seem to be one step ahead, armed with AI, endless ad accounts, and a business model that profits from chaos.

Until Europe forces tech giants to verify who is paying for financial ads, and hold them accountable when those ads scam citizens, the scam economy will keep thriving in our feeds.