Meta sued over scam ads

Meta is facing a new lawsuit that says Facebook and Instagram kept running scam ads while the company collected the ad money. (consumerfed.org) The Consumer Federation of America said it filed the case on April 21, 2026, in Superior Court in Washington, D.C., on behalf of itself and a proposed class of D.C. Facebook users. The complaint seeks damages, an accounting of alleged illegal profits, and court orders to change Meta’s practices under the District’s Consumer Protection Procedures Act. (consumerfed.org) The group says Meta misled users by overstating how aggressively it policed fraud while allowing ads for fake government benefits, bogus financial offers, and other schemes to circulate on Facebook and Instagram. Reuters reported the complaint also points to internal Meta records that estimated roughly $16 billion of 2024 revenue came from scam ads, illegal gambling, and banned goods. (finance.yahoo.com) That figure sits at the center of the case because Meta’s business still depends overwhelmingly on advertising, and the lawsuit argues the company had a financial reason not to shut suspicious advertisers down too quickly. Reuters previously reported that one late-2024 document estimated Meta was making about $7 billion in annualized revenue from “higher risk” scam ads alone. (cnbc.com) The same Reuters reporting said Meta showed users an estimated 15 billion “higher risk” scam ads a day and often banned advertisers only when its systems were at least 95% certain they were committing fraud. Suspected bad actors below that threshold could still stay in the ad system and face higher prices instead. (cnbc.com) The case lands after months of scrutiny over how social platforms handle paid fraud, which is different from ordinary spam because the scammer is buying distribution through the platform’s own ad tools. The complaint says that makes Meta not just a passive host for bad content, but a company that screened, priced, and delivered the ads. (wired.com) Meta said the allegations “misrepresent the reality of our work” and that it will fight the lawsuit. The company also pointed to recent anti-fraud steps, including expanded advertiser verification and a March 2026 policy blocking financial-services ads from sending users to private messages, which scammers often use to continue pitches off-platform. (consumeraffairs.com) The lawsuit is narrower than a general attack on Meta’s apps: it focuses on scam advertising on Facebook and Instagram, not on Threads or WhatsApp, and it is framed under D.C. consumer law. That gives the case a concrete test of whether public claims about platform safety can count as deceptive marketing when users say the paid ads tell a different story. (fox13news.com) For advertisers, the dispute adds another risk to buying media on giant automated platforms: not just whether an ad performs, but whether it appears in an auction crowded by suspected fraud and next to scams that can damage trust. For Meta, the next fight is no longer only about moderation policy, but about whether its ad business itself belongs in court. (emarketer.com)