After DSA child safety violations, Meta is facing another major legal challenge after Santa Clara County filed a lawsuit accusing the tech company of profiting from fraudulent advertisements on Facebook and Instagram.
County officials claim Meta knowingly allowed scam ads to spread across its platforms, causing financial harm to senior citizens and other vulnerable users.
Lawsuit Cites Internal Concerns and Investigations
The legal filing references a previous Reuters investigation that reportedly uncovered internal company discussions regarding the scale of scam advertising on Meta's platforms.
County officials allege that despite repeated warnings and public criticism, Meta failed to adequately stop repeat offenders from targeting users through sponsored content.
The lawsuit, led by County Counsel Tony LoPresti, argues that Meta financially benefited from what officials described as a "vast ecosystem of scam ads."
According to the complaint, fraudulent advertisers allegedly spent billions of dollars promoting deceptive schemes through Meta's advertising systems.
The lawsuit claims the social media giant generates billions of dollars annually from advertising revenue linked to fraudulent promotions while allowing weaknesses in its moderation systems and advertising policies to persist.
During a press conference, LoPresti stated that local authorities could no longer ignore what they view as harmful practices occurring on some of the world's largest social media platforms.
Meta Defends Its Anti-Scam Policies
Facebook's parent firm strongly denied the allegations and said it intends to challenge the lawsuit in court. A company spokesperson argued that the claims unfairly misrepresent the company's efforts to combat scams, fraud, and deceptive advertising.
According to Meta, the company removed more than 159 million scam advertisements last year while also launching additional safety tools and cooperating with law enforcement agencies worldwide.
Despite these efforts, advocacy groups continue criticizing the company's handling of fraudulent ads, per Engadget.
Recently, the Center for Countering Digital Hate released a report alleging that Medicare-related scam campaigns targeting seniors generated millions of dollars in Facebook advertising revenue.
Legal Pressure on Meta Keeps Piling Up
The Santa Clara County lawsuit adds to Meta's expanding list of legal disputes tied to online scams and consumer protection concerns.
Last month, the Consumer Federation of America also filed a proposed class action lawsuit accusing Meta of violating consumer protection laws through misleading and fraudulent advertisements.
In 2025, Meta reportedly cost Americans $2.1 billion due to fraud schemes, according to an FTC report.
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