Consumer watchdog group files suit alleging Meta profited on ads for scams

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In brief

• Consumer Federation of America files class-action in D.C.
• Meta estimated to earn $7 billion annually from scam ads
• Complaint alleges Meta tolerated scam ads via Chinese partners

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

“Meta has knowingly taken steps and adopted policies that pad its bottom line at the expense of its users’ safety and well-being,” states the complaint, which was filed on April 21 by CFA, an association of non-profit consumer organizations, in Superior Court in Washington, D.C. It asks for a jury trial and seeks to recover damages for local consumers.

The CFA 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 a day, earning an annualized $7 billion a year in revenue.

Reuters also reported that Meta internally projected in 2024 that it would earn about 10% of its overall annual revenue – or $16 billion – from running ads for scams and banned goods, internal company documents show.

In a statement about the CFA’s legal action, Meta said: “These allegations misrepresent the reality of our work and we will fight them.” The company also noted an announcement last month in which it said it was expanding its advertiser-verification efforts and had begun prohibiting financial services-related ads from steering users to private messaging services, a common tactic of financial scammers.

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

The complaint also alleges, as Reuters has reported, that Meta has tolerated widespread scam ad activity by its business partners in China. These partners include digital advertising middlemen that the company has authorized to resell ads through so-called “agency accounts.” To protect that business, the CFA alleges, Meta continued to accept ads via a system that facilitated ads for fraudulent activities.

The CFA complaint was reported earlier by Wired magazine.