Meta Faces Lawsuit Claiming Profits From Scam Ads and Fraud Allegations

The Consumer Federation of America has filed a class-action complaint against Meta Platforms, alleging that the social media giant profited from advertising linked to fraudulent activities on its platforms and misled users about its efforts to tackle the issue.

“Meta has knowingly taken steps and adopted policies that pad its bottom line at the expense of its users’ safety and well-being,” the complaint states. It was filed on Tuesday by the CFA, an association of non-profit consumer organisations, in the Superior Court in Washington, D.C. The group is seeking a jury trial and damages for local consumers.

The complaint cites previous reporting by Reuters on internal Meta documents that revealed the scale of scams on Facebook and Instagram. According to Meta’s own 2024 estimates, the company showed users 15 billion “higher-risk” scam ads daily, generating an annualised $7 billion in revenue.

Reuters also reported that Meta internally projected in 2024 that it would earn about 10 per cent of its overall annual revenue — or $16 billion — from advertisements linked to scams and banned goods, according to company documents.

Responding to the legal action, Meta said: “These allegations misrepresent the reality of our work and we will fight them.” The company also pointed to an announcement last month stating it was expanding advertiser verification measures and had begun prohibiting financial services-related ads from directing users to private messaging services — a common tactic used by financial scammers.

The CFA complaint further alleges that “Meta has repeatedly and publicly downplayed the risks of scams on its platforms to its users, creating a false impression of safety”.

It also claims, as previously reported by Reuters, that Meta has tolerated widespread scam advertising activity by business partners in China. These include digital advertising intermediaries authorised to resell ads through so-called “agency accounts”. To protect that business, the CFA alleges, Meta continued to accept advertisements through systems that facilitated fraudulent activity.

The complaint was first reported by Wired.

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