The Consumer Federation of America is accusing Meta of misleading consumers about its attempts to mitigate scams
The Consumer Federation of America (CFA), a non-profit organisation, has filed a lawsuit against tech giant Meta.
The suit alleges that Meta did not adequately protect consumers against scammers on Facebook and Instagram, which violates Washington DC’s consumer protection laws.
Meta came under fire last year for supposedly generating roughly $16bn in ad revenue from online scams or illegal online gambling ads, equating to roughly 10% of its 2024 revenue.
The tech giant was exposed for failing to identify an “avalanche” of advertising messages, which exposed “billions of users to fraudulent e-commerce and investment schemes, illegal online casinos, and the sale of banned medical products”. It recorded around $7bn from those ads per year, according to a late 2024 internal document.
“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,” CFA stated in the suit.
The group has also accused Meta of knowingly taking steps and adopting policies that “pad its bottom line at the expense of its users’ safety and well-being,” with the platform creating a “false impression of safety” for its users.
“As Americans lose more and more money to online scams, Meta has consistently chosen to prioritise profit over the safety of their users,” Ben Winters, director of AI and data privacy at the CFA, said.
The CFA found ads in Meta’s ads library which it claims are well-known scams, including some that specifically target people by their birth year, offering false $1,400 cheques or free iPhones.
This isn’t the first time Meta has been accused of risking user safety by failing to prevent fraudulent and illegal ads. An investigation in the UK found over 1,000 ads, shown in just a one-week period, promoted complex financial instruments and currency trading without authorisation from regulators.
The move comes, despite Meta launching multiple lawsuits itself in a bid to fight against scam ads.
Tech firms have been under scrutiny in recent months as landmark cases reveal a public and legal appetite for retribution against addictive and harmful social media platforms that were found to have risked user safety just to fuel their algorithms. It’s likely that more lawsuits will follow in the coming weeks and months.
