The nonprofit Consumer Federation of America filed a lawsuit against Meta in April 2026, alleging that the company profited from fraudulent advertising on Facebook and Instagram in violation of Washington, DC’s consumer protection laws.
The CFA’s complaint centers on scam ads that it says Meta allowed to “proliferate on its platforms” despite public commitments to combat fraud. Examples cited in the lawsuit include ads targeting users by birth year and promising $1,400 checks, as well as ads advertising free government iPhones. Ben Winters, CFA’s director of AI and data privacy, told WIRED that additional questionable ads can be found by searching Meta’s ad library using terms like “free phone” and “stimulus check.” A review of the library found live ads for “secret tax checks” linking to a website promoting an investing strategy. Meta did not respond to questions about whether those ads comply with its policies.
Meta spokesperson Chris Sgro disputed the claims, saying, “These allegations misrepresent the reality of our work and we will fight them.” Sgro also stated that Meta removed over 159 million scam ads last year, 92 percent before anyone reported them, and took down 10.9 million accounts linked to criminal scam centers.
The lawsuit follows a series of damaging disclosures. In late 2025, Reuters reported on internal Meta documents, including a May 2025 presentation estimating that Meta’s platforms were involved in a third of all successful scams in the US. A separate internal review cited by Reuters found it “is easier to advertise scams on Meta platforms than Google.” A 2024 Meta document estimated the company would earn roughly 10.1 percent of its revenue that year — approximately $16 billion — from ads tied to scams or other prohibited content. For context, the FBI estimated Americans lost $16 billion to all internet crimes in 2024. Meta called that internal estimate “rough and overly inclusive” and said actual figures were lower, without specifying by how much.
In June 2025, a bipartisan coalition of state attorneys general, including New York AG Letitia James, urged Meta to address Facebook ads funneling users into WhatsApp investment scam groups, stating that Meta’s existing measures were not working and that scam ads continued to appear months after being reported.
The CFA is seeking damages, recovery of what it describes as illegal profits, and business reforms from Meta. The case carries broad implications given that Facebook, Instagram, and WhatsApp are among the most widely used online platforms in the US, according to a recent Pew Research Center report. Winters said more needs to be done to remove repeat violators and vet ads promising nonexistent government programs before they reach consumers.
Source: Business Latest