Meta accused of profiting from scam ads in class-action lawsuit

This week, a class-action lawsuit was filed against Meta in Washington, DC, alleging that the company deceived Facebook users about scam ads and profited from them.

Tyco & Zaveri LLP and Tech Justice Law filed the complaint on April 21 under the DC Consumer Protection Procedures Act on behalf of the Consumer Federation of America and Washington, DC Facebook users. The complaint says that while Meta publicly claims to be fighting scams, internal documents (published by Reuters in December 2025) show it is making billions from them.

The documents show that in 2024, Meta estimated that about 10 percent of its revenue – about $16 billion – would come from ad scams and banned products. According to the documents, users are apparently exposed to 15 billion “high-risk” scam ads every day. Meta clearly overcharged these high-risk advertisers while rejecting 96 percent of legitimate user fraud reports.

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“As a matter of company policy, Meta has knowingly profited from massive, inexcusable harm to users on its platform,” Sarah K. Wiley, attorney and managing director of Tech Justice Law, said in a press release. “Meta told its users it was fighting fraud. Internally, it was charging scammers a premium for access to those same users. This is not a failure of enforcement, this is a business model built on predatory deception.”

“These allegations misrepresent the reality of our work and we will fight them,” a Meta spokesperson told Mashable.

“We aggressively combat scams on our platforms to protect people and businesses – last year alone, we removed more than 159 million scam ads, 92 percent of which we removed before anyone reported them, and removed 10.9 million accounts on Facebook and Instagram linked to criminal scam centers. We fight scams because they’re bad for business – people don’t want them, advertisers don’t want them Are, and we don’t want them either,” the spokesperson continued.

The complaint comes just weeks after Meta announced new tools to fight scams on its platforms like Facebook and Instagram, including working with law enforcement. In recent years, Meta has reportedly rejected ads from legitimate businesses, such as sex toy shop Unbound (unless they created fake ads targeted at men) and healthcare platform Day.