Much to no one’s surprise, Meta, the tech conglomerate behind Facebook and Instagram, is getting sued again, which has become fairly common for big tech companies. But what makes this case interesting is the reason behind it.
Late last month, Techloy covered a new report from the U.S. Federal Trade Commission (FTC), which stated that Americans lost over $2.1 billion to social media scams. Facebook alone accounted for $794 million of those losses, while WhatsApp and Instagram contributed another $659 million combined. Now, Meta is being accused of profiting from many of those scams.
As reported by Reuters, Santa Clara County, on behalf of California residents, is suing Meta, alleging that the company tolerated “fraudulent advertising on a global basis” that targeted vulnerable people, especially seniors. The lawsuit, which was filed on Monday, cites leaked internal documents, first reported by Reuters last year, which allegedly showed that Meta earned nearly $7 billion annually from “high-risk” scam ads.
The lawsuit argues that Meta knew many of these ads showed signs of fraud but did not act aggressively enough to stop them, allegedly because the ads generated significant revenue.
Even the tech watchdog Center for Countering Digital Hate (CCDH) found that Medicare scam ads alone earned Meta $14.3 million last year. These ads included fake promises of “free benefits,” AI-generated celebrity deepfakes, and fake enrollment deadlines targeting people aged 65 and older. According to the report, one scammer account had 151 ads removed by Meta. But by the time those ads were taken down, they had already generated 72 million impressions and earned Meta $3.7 million.
Refuting the allegations, a Meta spokesperson told CNET: “We aggressively fight scams on and off our platforms because they’re not good for us or the people and businesses that rely on our services. We removed over 159 million scam ads last year alone.”
But the lawsuit pushes back on that defence, arguing that many of the ads were removed only after they had already generated revenue, while disabled scam accounts simply created new ones.
Adding fuel to the fire, a second lawsuit making similar allegations has also been filed by the Consumer Federation of America (CFA), a Washington, D.C.-based nonprofit organisation.
“Meta has adopted policies and practices that it knows allow scam advertisements to proliferate on its platforms while simultaneously profiting off those ads at its users’ expense,” the lawsuit stated.
This is hardly uncharted territory for Meta. Back in 2022, Australia’s competition watchdog, the Australian Competition & Consumer Commission (ACCC), sued Facebook over scam ads featuring famous Australians. In one case, a victim reportedly lost $480,000. The ACCC chair at the time called the situation “disgraceful.”
Between mounting lawsuits and growing FTC data showing social media scam losses continuing to rise, Meta’s repeated assurances that it is fighting scams may increasingly face public scrutiny.
