• by Mark Walsh  @markfwal, November 6, 2009

Facebook is cracking down on companies that make scam offers in third-party applications as part of its broader effort to police deceptive advertising on the site.

In a blog post late Thursday on its developer blog, Facebook said it has banned two more offer and ad networks for running misleading ads since it updated its policies for third-party ads in applications in July.

The move comes amid rising controversy surrounding the networks that provide offers through social gaming apps on Facebook and other properties that entice people into paying for services or subscriptions with bogus come-ons.

"This battle is not new and it's far from over. We faced stimulus scam ads on our own system earlier this year and pushed them off the site with rigorous enforcement. We did the same months later when deceptive ads from third-party ad networks appeared in applications. We're doing that again now as we see them appear in the form of offers," read the Facebook post.

Facebook did not disclose which ad networks it suspended. Earlier this year, Facebook banned networks SocialHour and SocialReach for allegedly running misleading in-app ads and using Facebook member data on outside landing pages.

The company said it had also "suspended or brought into compliance" more than 100 applications for ad-related violations in regions globally, over half of which had more than one million monthly active users.

"We recognize that monitoring ads isn't the first area of focus for an entrepreneur just getting started with social applications. That's why ad networks that don't play by the rules should expect to be our first point of contact in our line of enforcement," according to Facebook. The company says 70% of its 300 million users engage with apps each month.

The offer networks have come under increased scrutiny since TechCrunch ran a series of posts this month focusing on lead-generations and other scams that power social gaming companies like Zynga and Playfish.

And at the recent Virtual Goods Summit in San Francisco, TechCrunch founder Michael Arrington got into a spat with Anu Shukla, founder of Offerpal Media, who vehemently denied his accusations that the company has built its business on scamming users.

On Thursday, Offerpal announced that Shukla was being replaced as CEO by Internet ad veteran George Garrick. In an unusual post on the company blog Thursday, Garrick admitted: "Offerpal has been guilty of distributing offers of questionable integrity from some of our many advertisers." He also said Offerpal had not complied with Facebook standards.

To keep bogus offers from surfacing in the future, the new CEO outlined several steps that Offerpal would take, including inspecting each offer individually before it runs and doing "everything we can within reason to lead the industry and set the example in these efforts."

Facebook is not the only social network afflicted by ad scams. Earlier this week, MySpace updated its apps terms of use to further insure against deceptive ad practices. Specifically, the company added a fifth rule prohibiting promotions that include hidden renewals without specific opt-in permission.

In the wake of the TechCrunch posts, companies such as Zynga and app distributor RockYou have also taken steps to clean up misleading advertising on their networks. To that end, Zynga said it had already banned Tatto Media from running ads in game apps.

Tatto in March agreed to pay $500,000 to settle a complaint brought by the Washington Attorney General accusing it of continuing to run an ad that allegedly tricked people into signing up for paid horoscopes by preying on their romantic hopes.

Companies such as Offerpal and Zynga are part of the rapidly growing virtual goods market online, expected to double this year to $1 billion, according to a recent study by InsideFacebook editor Justin Smith and Charles Hudson of Serious Business.