Lawsuit Accuses Meta of Profiting From Widespread Fraud On Its Platforms

Consumers lost at least $2.7 billion to scams originating on social media platforms between 2021 and 2023, according to a newly filed lawsuit that alleges Meta Platforms, Inc. played a central role in enabling the activity.

The Consumer Federation of America (CFA) filed a class action complaint today in the Superior Court of the District of Columbia. The lawsuit, first reported by Wired, accuses Meta of violating the District’s Consumer Protection Procedures Act (CPPA), alleging the company misled users about platform safety while prioritizing advertising revenue over fraud prevention.

According to the complaint, Meta’s internal documents projected that more than 10% of its 2024 annual revenue, roughly $16 billion, would be derived from advertising for “scams and banned goods to run on their platforms, including Facebook.” The filing further claims that Facebook users are exposed to approximately 15 billion “likely” scam advertisements daily, generating an estimated $7 billion in annualized revenue.

Much of the basis for the suit is based on reporting by Jeff Horowitz for Reuters last year. In the November 2025 investigation, Reuters examined internal documents indicating that over a period of at least three years, the company failed to detect and curb “an avalanche of ads that exposed Facebook, Instagram and WhatsApp’s billions of users to fraudulent e-commerce and investment schemes, illegal online casinos, and the sale of banned medical products.”

The lawsuit further cites Reuters’ findings on a 2023 internal document, alleging that Meta failed to adequately enforce its own anti-fraud safeguards. It alleges that while the company publicly states it “aggressively” combats scams, reporting indicates that users submit about 100,000 valid fraud reports each week. Of those, the suit claims, 96% are either ignored or incorrectly rejected.

CFA also alleges that Meta imposed internal limits on enforcement actions, pointing to Reuters reporting on a 2025 document that appeared to restrict teams from taking measures that could reduce company revenue by more than 0.15%. Additionally, the complaint alleges that even when Meta’s systems identify advertisers with up to a 95% likelihood of running scams, the company does not remove them outright but instead applies a “penalty bid” fee—allowing ads to continue running at a higher cost.

The complaint also points to additional reporting from Reuters on Meta’s efforts to evade enforcement actions against the company. For example, Japanese regulators began using Meta's publicly searchable Ad Library to investigate the presence of scam advertisements on its platforms, and the company allegedly altered the database by removing certain fraudulent ads. As the complaint notes, the effectiveness of this approach led Meta to incorporate the tactic into a broader “global playbook” designed to counter regulatory oversight in multiple jurisdictions, including the United States.

The filing contrasts Meta’s practices with those of competitors such as Google, which reportedly suspended 12.7 million advertiser accounts and 5.5 billion “bad advertisements” in 2023. In comparison, it says, Meta removed 134 million pieces of “scam content” in 2025.

The broader financial impact of online fraud is significant. A recent CFA report estimates that Americans lose more than $119 billion annually to scams, with residents of the District of Columbia experiencing the highest per capita losses—about $2.1 billion each year.

According to the complaint, Meta's actions violated the District’s CPPA in four ways.

First, the lawsuit alleges Meta misrepresented material facts by overstating its efforts to mitigate scam advertising on its platforms, including Facebook.

Second, the complaint accuses Meta of omitting information that would alter users’ understanding of platform safety. According to the filing, Meta did not disclose that it had adopted policies allowing significant volumes of known scam advertising to appear on Facebook, that it was profiting from such activity, or that its targeted advertising systems were being used to help bad actors.

Third, the lawsuit alleges Meta misled consumers about the scale of fraud on its platforms.

Finally, the complaint characterizes Meta’s overall handling of scam advertising as an unfair trade practice. CFA argues that users cannot reasonably avoid exposure to targeted scam ads and that the company’s practices are “substantially injurious, oppressive, and harmful to consumers.”

CFA is seeking a permanent injunction of Meta’s unlawful trade practices, as well as actual damages, treble damages or $1,500 per violation (whichever is greater), and punitive damages.

In a statement to Wired, a Meta spokesperson said, “These allegations misrepresent the reality of our work and we will fight them.”