Meta scam ad lawsuit alleges company profited billions while misleading users
FILE - Meta logo and logos of Facebook, Instagram, WhatsApp, Messenger and Threads are screened on a mobile phone for illustration photo. (Photo by Beata Zawrzel / NurPhoto via Getty Images)
A consumer group filed a lawsuit against Meta, alleging that the tech giant allows and profits from scam ads spreading across Facebook and Instagram, while misleading users about their intentions and efforts to fight against them.
Here’s what to know about the lawsuit:
Meta lawsuit 2026
Big picture view:
The latest lawsuit against Meta was filed in Washington, D.C. by the Consumer Federation of America, a nonprofit association of more than 200 organizations that represent consumer interest.
The lawsuit alleges Meta allowed scam advertisements to spread across Facebook and Instagram, profiting from them, while misleading users about its efforts to fight against them. The lawsuit did not mention Meta's other platforms, Threads or WhatsApp.
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Scam ads on Facebook, Instagram
Examples:
Many of the scam ads are typically disguised as government benefits or financial help, the lawsuit argued. Here are some examples given:
- A promise of "$1,400 checks" based on birth year
- An offer to get "free government iPhones"
- Advertisements for clearly-banned products in the US, like crib bumpers
The lawsuit also alleged that many of the scam ads use AI video.
Dig deeper:
The complaint argues Meta has long been aware of fraudulent ads but failed to take meaningful action to stop them.
It also claims that rather than blocking advertisers it has identified as higher risk, Meta charged those advertisers more.
"The perverse result is that the riskier the advertiser, the more money Meta makes," the lawsuit reads.
What they're saying:
"Even when Meta’s internal systems determine the odds that a given advertiser is running scam advertisements are as high as 95%, Meta does not remove the ads at issue; rather, it increases the price these bad actors pay by charging a "penalty bid" fee to reach and exploit its users—allowing Meta to profit even more when its users face greater risks," the lawsuit reads.
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By the numbers:
The lawsuit cited reporting from Reuters in 2025 that claimed:
- Meta has estimated it shows users 15 billion scam ads a day
- Meta estimated that more than 10% of its 2024 earnings would come from scam advertisements, illegal gambling, and the sale of prohibited goods on its platforms ($16 billion)
The other side:
A Meta spokesperson told FOX Television Stations the allegations "misrepresent the reality of our work" and that it would fight against them.
"We aggressively combat scams across our platforms to protect people and businesses — last year alone, we removed over 159 million scam ads, 92% of which we took down before anyone reported them, and took down 10.9 million accounts on Facebook and Instagram associated with criminal scam centers. We fight scams because they are bad for business - people don't want them, advertisers don't want them, and we don't want them either," a Meta spokesperson said in an email.
The spokesperson added that Meta continues to invest in new technologies, most recently of which has included tools to combat securities investment and celeb-bait scams, and that it is expanding advertiser verification.
Last month, Meta launched new anti-scam tools on Facebook, Messenger and WhatsApp that deploys AI technology to fight scammers.
What's next:
The lawsuit asks for a jury trial and is looking to recover damages for local Washington, D.C. consumers.
The Source: Information in this article was taken from the lawsuit filed by the Consumer Federation of America, and previous Reuters reporting in 2025. Information was also taken from CBS News, which obtained a statement from Meta on the lawsuit. This story was reported from Detroit.