Meta scam-ad lawsuit

The Consumer Federation of America sued Meta on April 21, accusing the company of profiting from scam ads on Facebook and Instagram while telling users it was cracking down. (consumerfed.org) The proposed class action was filed in Superior Court in Washington, D.C., on behalf of the group and D.C. Facebook users under the District’s Consumer Protection Procedures Act. The complaint seeks damages, disgorgement of alleged illegal profits, injunctive relief, and a jury trial. (consumerfed.org) Reuters reported that the complaint leans on internal Meta documents showing the company estimated users saw 15 billion “higher risk” scam ads a day in 2024, generating about $7 billion in annualized revenue. The same reporting said Meta internally projected about 10% of 2024 revenue, or roughly $16 billion, would come from scams and banned-goods ads. (money.usnews.com) The case lands as fraud losses keep rising beyond Silicon Valley. The Federal Trade Commission said consumers reported losing $12.5 billion to fraud in 2024, and losses tied to contacts on social media totaled $1.9 billion, the highest for any contact method. (consumer.ftc.gov) The lawsuit focuses on a gap between Meta’s public safety claims and its ad business. CFA says Meta did not simply miss scam ads; it identified some advertisers as higher risk and charged them higher rates to reach users. (cbsnews.com) Meta said the lawsuit “misrepresent[s] the reality of our work” and said it would fight the claims. The company told CBS News it removed more than 159 million scam ads last year, 92% before any user report, and took down 10.9 million Facebook and Instagram accounts linked to criminal scam centers. (money.usnews.com) (cbsnews.com) Meta has also been tightening its ad controls in recent weeks. In a March 11 post, the company said it was expanding advertiser verification in higher-risk categories and aiming for verified advertisers to drive 90% of ad revenue by the end of 2026, up from 70% at the time of the announcement. (about.fb.com) Reuters said the complaint also points to Meta’s China-based ad-reseller system, including “agency accounts” that outside middlemen use to place ads at scale. CFA argues that setup helped keep scam advertising flowing even as Meta publicly described broad anti-fraud efforts. (money.usnews.com) For users and brands, the case turns on a basic question: whether a platform can market safety while earning money from ads it considers risky. Meta says it is already removing scams at scale; the court fight will test whether those efforts matched what the company told the public. (consumerfed.org) (money.usnews.com)