I'm surprised legitimate companies don't pressure Facebook on this though. There are enough scams on Facebook that I now refuse to believe anything there, even though some of the things look useful and probably are not scams (and also are things I didn't know existed without an ad - thus filling one of the legitimate values of advertisements: informing me of things that would make my life better but I don't know exist).

This is actually illegal here in Sweden though. Lawsuits are ongoing.

I'm kind of surprised that there haven't been criminal cases.

This is why Section 230 is fundamentally wrong. Because the core concept of it assumes reasonable behavior without monetary incentives. Which is great if you're legislating someone's personal forum about their hobby. But Section 230 applied to the ad industry is incredibly, incredibly broken, because advertising companies do not have any incentive to act in good faith.

As soon as a dollar of profit is involved in a content moderation decision, a business should be fully liable for the decisions around content on their platform. If I report an ad to Facebook and Facebook decides to keep it they should be accepting legal responsibility for that ad.

You want to stop scams online, you make the platforms liable and then grant them the ability to recover the losses by going after the advertisers.

Your first assertion is obviously untrue. And fake celebrity endorsements pre-date the existence of the Internet, let alone Meta. There were lawsuits back in the 1800s on this topic. This is hardly a new problem unique to Meta.