A class-action lawsuit has been filed against Meta in Washington, D.C., alleging the company misled Facebook users regarding scam advertisements and profited from them. The lawsuit, initiated by Tycko and Zavareei LLP and Tech Justice Law on April 21, cites violations of the D.C. Consumer Protection Procedures Act. It represents both the Consumer Federation of America and Facebook users within the district.
The complaint references internal documents that suggest Meta has generated substantial revenue from advertising scams, contrary to the company's public stance of combating such fraud. According to these documents, it is estimated that in 2024, around 10 percent of Meta's revenue—approximately $16 billion—was derived from scam and banned product advertisements. Users reportedly encounter around 15 billion "high-risk" scam ads daily, with Meta allegedly charging higher rates to these advertisers while dismissing 96 percent of legitimate fraud reports.
Sarah Kay Wiley, an attorney with Tech Justice Law, characterized Meta's practices as a deliberate strategy to profit from the harm caused to users, asserting that the company's claims of fighting fraud are misleading. In response, a Meta spokesperson contested these allegations, stating that they misrepresent the reality of the company’s efforts. The spokesperson highlighted that Meta has removed over 159 million scam ads in the past year and taken action against millions of accounts linked to scams, emphasizing that combating scams aligns with their business interests.
This lawsuit follows Meta's recent announcements of new tools aimed at reducing scams on its platforms, which include collaborations with law enforcement. The legal action underscores ongoing concerns about the effectiveness of Meta's advertising policies and user protection measures.