Meta Faces Lawsuit Over $16 Billion in Scam Ads

The Consumer Federation of America filed a class-action lawsuit (on behalf of consumers) against Meta on April 21, alleging the company knowingly profits from scam ads on Facebook and Instagram while telling users it's cracking down on them.

According to Meta's own 2024 internal numbers cited in the complaint, the company showed users 15 billion *higher risk* scam ads per day, bringing in roughly $7 billion a year. The same documents suggest that scam ads and ads for banned products could account for about 10% of Meta's total annual revenue, or around $16 billion.

The lawsuit claims Meta created a 'perverse incentive.' Instead of banning high-risk advertisers, the company charged them higher rates, so the more risky the ad, the more money Meta made.

Meta says the allegations are misleading. It claims it removed over 159 million scam ads in 2025 and is now expanding advertiser verification. They've also started banning financial ads that try to push people into private messages. The case was filed in Washington, D.C. Superior Court and is asking for a jury trial.