Meta Is Sued Over Scam Ads on Facebook and Instagram

On Tuesday, the nonprofit Consumer Federation of America filed a lawsuit against Meta, alleging that the social media giant’s treatment of scammers on its platforms violates Washington’s consumer protection laws.

While many online scams involve direct outreach to victims by scammers (who are often human trafficking victims themselves trapped in fraud schemes), the CFA lawsuit focuses on the fraudulent advertising that CFA alleges Meta took advantage of and allowed to “proliferate on its platforms,” ​​despite publicly promising that it takes crackdowns on fraud and scams seriously.

In its complaint, CFA highlights ads found in Meta’s ad library that CFA says are well-known types of scams, including several that appear to target people based on their year of birth and tout $1,400 checks, as well as others that advertise free government iPhones.

Speaking to WIRED, Ben Winters, director of AI and data privacy at CFA, says others can find more questionable ads simply by searching the Meta ad library using keywords like “free phone” and “stimulus check.” WIRED’s quick scan of the ad library Monday shows more live ads for “secret tax audits” that lead to a website that promises to reveal “Wall Street’s recession-proof investment strategy.”

Meta did not immediately respond to a request for comment.

The CFA is seeking to recover damages and what it considers to be illegal profits from Meta, in addition to trade reforms. Winters says there’s still more work to do to weed out repeat infringers and examine ads that promise things like free government programs that don’t exist before they’re presented to consumers.

Meta has come under particular scrutiny because Facebook, Instagram and WhatsApp, all of which are owned by Meta, are among the most used online platforms by Americans, according to a recent Pew Research Center report. In late 2025, Reuters reported on a set of internal Meta documents detailing how the company handled fraudulent and prohibited user activity, including a May 2025 presentation estimating that its platforms were involved in a third of all successful scams in the United States. Another presentation cited by Reuters claimed that an internal review of Meta found that “it is easier to advertise scams on Meta platforms than on Google.”

A 2024 Meta document cited by Reuters estimated that the company would earn 10.1% of its revenue that year, or about $16 billion, from ads that were actually scams or other types of banned content. To put this number in perspective, the FBI estimates that by 2024, Americans will have lost $16 billion due to all internet crimes. At the time, a Meta spokesperson called the estimate “rough and overly inclusive” and said the body of material reported by Reuters “misrepresents Meta’s approach to fraud and scams” and that actual revenues were lower, but he declined to tell Reuters by how much.

In June 2025, a bipartisan coalition of state attorneys general urged Meta to crack down on Facebook ads that drove consumers to WhatsApp groups used to run investment scams. The letter, signed by New York AG Letiticia James, stated that Meta’s solutions did not work and that New York investigators continued to see fraudulent advertisements months after submitting reports to Meta.

Since then, the U.S. Virgin Islands Attorney General’s Office has filed a lawsuit against Meta that, among other things, alleged that the company not only failed to crack down on fraudulent advertising, but that it charged advertisers higher rates to serve ads flagged as likely to be fraudulent. This trial is ongoing.

Although the federal government and many states have consumer protection laws similar to the Washington, D.C. law that the CFA alleges Meta violated, Winters says he’s not holding his breath for the federal government to act, and while he appreciates the work of state attorneys general, he thinks consumers need help now.

“We appreciate their work and think it’s absolutely essential, but we’re eager for them to act when we haven’t seen them be able to act as quickly as necessary,” Winters says. “That’s why nonprofits and civil society exist in an idealized world, right? To fill in the gaps where there are any.”