“Facebook have made no policies change for third-party advertisers and the use of public photos. These rumors’re false, and those ads were from few 3rd party apps, since they violated policies, they’ve been removed. Also prohibited two entire advertising networks,” said Barry. “If it's one of our ads, you can simply click the thumbs-down icon that appears above or below the ad to report it. If the ad is from a third-party app, click "Report" link at the bottom to report it to the developer and us. If you see a Wall post or receive a message with following language or something similar, it’s this false rumor:”
FACEBOOK has agreed to let third party advertisers use your posted pictures WITHOUT your permission.
To change your settings: Click on "Settings" up at the top where you see the "Logout" link. Select "Privacy". Then select "News Feed and Wall". Next, select the tab that reads "Facebook Ads". In the drop down box, select "No One". Then save your changes.