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 way the social networking giant handles scammers on its platforms violates Washington, DC’s consumer protection laws.

While many online scams involve direct outreach to victims by scammers (who are often themselves human trafficking victims trapped in scam compounds), CFA’s lawsuit focuses on fraudulent advertising that CFA alleges Meta profited from and allowed to "proliferate on its platforms,” despite publicly promising that it takes cracking down on fraud and scams seriously.

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

In a statement, Meta spokesperson Chris Sgro says, “These allegations misrepresent the reality of our work and we will fight them.”

Speaking with WIRED, Ben Winters, CFA’s director of AI and data privacy, says others can find more dubious ads just by searching Meta’s ad library using key words like “free phone” and “stimulus check.” WIRED’s quick perusal of the ads library on Monday shows more live ads for “secret tax checks” that lead to a website that promises to reveal “Wall Street’s recession-proof investing strategy.”

Meta did not respond to questions about whether the ads for “secret tax checks” are allowed under its policies.

CFA is seeking to recover damages and what it says are illegal profits from Meta, in addition to business reforms. Winters says that there’s more to be done to take down repeat violators and scrutinize ads that promise things like free government programs that don’t exist before they’re put in front of consumers.

Meta has faced particular scrutiny because Facebook, Instagram, and WhatsApp—which are all owned by Meta—are among the most widely 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 that detailed how the company dealt with fraudulent and prohibited user activity, including a May 2025 presentation that estimated that its platforms were involved with a third of all successful scams in the US. Another presentation cited by Reuters alleged that an internal Meta review found it “is easier to advertise scams on Meta platforms than Google.”

One Meta document from 2024 that Reuters cited estimated that the company would earn 10.1 percent of its revenue that year—around $16 billion—from ads that were actually scams or other types of prohibited content. To put that figure in perspective, the FBI estimated that in 2024, Americans lost $16 billion from all internet crimes. At the time, a Meta spokesperson called the estimate “rough and overly inclusive” and said that the set of documents Reuters reported on “distorts Meta’s approach to fraud and scams” and that the actual revenue was lower, but declined to tell Reuters by how much.

“We aggressively combat scams across our platforms to protect people and businesses,” says Sgro, the Meta spokesperson. “[L]ast year alone, we removed over 159 million scam ads, 92 percent of which we took down before anyone reported them, and took down 10.9 million accounts on Facebook and Instagram associated with criminal scam centers.”

In June 2025, a bipartisan coalition of state attorneys general urged Meta to crack down on Facebook ads that led consumers to WhatsApp groups that were used for carrying out investment scams. The letter, which was signed by New York AG Letiticia James, said that Meta’s solutions were not working and that investigators in New York kept seeing scam advertisements months after submitting reports to Meta.

Since then, the US Virgin Islands attorney general’s office filed a lawsuit against Meta that, among other things, alleged that the company not only failed to crack down on scam advertising but charged advertisers higher rates to run ads flagged as likely to be fraudulent. That lawsuit is ongoing.

Though the federal government and many states have similar consumer protection laws as the DC law that CFA alleges Meta violated, Winters says he’s not holding his breath for the federal government to take action, and while he appreciates the work of state attorneys general, he believes consumers need relief now.

“We appreciate their work and think it's absolutely critical, but we can't wait for them to act when we haven't seen them able to act as quickly as we need to,” Winters says. “This is why nonprofits and civil society exist in the idealized world, right? To fill in gaps where there are gaps.”