Meta is now the target of a class-action lawsuit that claims the company misled users about scam protection and made money from fraudulent ads.
The Consumer Federation of America filed the complaint in Washington, D.C., Superior Court, saying Meta did not block risky ads and even charged some scam advertisers higher fees to show their content.
Consumer group says Meta created a false sense of safety
The lawsuit says Meta made Facebook and Instagram seem safer than they actually were, while letting scam ads stay on its platforms.
According to CBS News, the Consumer Federation of America accused Meta of minimizing the amount of fraud on its apps and giving users a “false impression of safety.”
The complaint says Meta broke a Washington, D.C., consumer protection law. The advocacy group is asking for damages and wants to get back what it calls illegal profits from scam-related ads.
Ben Winters, director of AI and data privacy at the Consumer Federation of America, said in a statement that as Americans lose more money to online scams, Meta has “consistently chosen to prioritize profit over the safety of their users.”
Lawsuit cites billions in alleged scam-ad revenue
The lawsuit also refers to internal documents.
According to Reuters, the Consumer Federation of America claims Meta knowingly showed users up to 15 billion scam-related ads each day in 2024, which allegedly brought in about $7 billion in yearly revenue from a high-risk ad category.
The complaint alleges ads for scams and banned goods represented about 10% of Meta’s annual revenue, or around $16 billion, in 2024.
These numbers are key to the lawsuit because they suggest the problem is not just about moderation, but about Meta’s business model. The Consumer Federation of America argues that Meta’s ad system did more than just fail to stop scam content—it allegedly made a lot of money from it.
Meta denies the allegations
Meta rejected the claims. A spokesperson shared that the Consumer Federation of America’s allegations “misrepresent the reality of our work” and said the company works hard to fight scams on Facebook and Instagram.
The spokesperson said Meta took down over 159 million scam ads last year, with 92% removed before anyone reported them. The company also said it deleted 10.9 million Facebook and Instagram accounts linked to criminal scam centers.
Meta also said it is still investing in new technology to fight securities investment scams and other types of fraud.
A broader fight over platform accountability
This case adds to the growing pressure on Meta about how it handles paid content on its platforms. Scam ads are a big concern because paid placement and targeting can make them look more trustworthy to users than regular spam.
The lawsuit’s core question is whether Meta did enough to protect users once it knew scam ads were spreading — and whether the company’s ad business created financial incentives that made the problem harder to eliminate.
Right now, the case is still just allegations. But if the Consumer Federation of America can prove that Meta made money while misleading users about safety, the lawsuit could become an important test of how much consumer-protection law can affect digital advertising.
