While it's easier to avoid, most people actually use it for it's intended purpose. It's bad enough seeing FC advertisements in there, but when recruitments for other games start showing up, it's a problem.
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The Wildstar advertising is breaching ToS so it's hardly abuse of the report feature....
I also agree about the FC advertising and crap. Sometimes most of the PF on Midgard is either FCs recruiting or individuals advertising themselves for spots in statics. It's PARTY FINDER not FFXIV's version of Craigslist.
You sure that ToS part doesn't just apply to say someone actually involved with making another game advertising that game in FF? The person advertising just looks like a multi-game guild advertising in case anyone wants to join them on FF and other games. If the people advertising aren't someone that would actually profit from advertising another game I don't really see how that could be illegal.
But what should SE do? Make an investigation of those players' personal lives to see if they get a profit from another game or not? That's not viable. So, as it is it's just a blatant add (it's not the same as if I simply tell my FC in private how awesome that or that game is) from another game, and it's against the ToS.
And anyway, would you go to a McDonalds and yell at all their customers to come with you to a Burger King? Well, I guess you could, but you would get asked to please shut up or leave the place, because you're disturbing said customers that just want to eat their burger. It's the same here, really. When we go to the PF we want to see people looking other players to fill their parties, not someone recruiting and, much less, someone recruiting for a different and completely unrelated game. If we want to get anything from another game, we would go to the proper place to do so (that's it, to said other game or to a place related to said game).
Make sure to report those FC spammers too, hope they get banned for tainting the sacred Party Finder.
While you're at it make sure to report anyone who says even a single bad word in any chat, and if ANY DPS ever kills something out of order in a dungeon report them for attempting to block party progression.
It's great we have many dedicated people willing to protect the ToS like OP.