Meta is facing a new lawsuit accusing it of failing to protect its users from fraudulent advertising, in a case that could turn into a class-action lawsuit filed by the non-profit Consumer Association of America (CFA).
The lawsuit, first reported by Wired magazine, alleges that Meta, the owner of Facebook and Instagram, violated consumer protection laws in Washington, D.C., by misleading users about the risks of fraud on its apps, accusing the company of "seeking to profit at the expense of protecting its users."
The legal team reviewed examples of fraudulent ads found in Meta's ad library, including ads promoting a "free government iPhone" and others claiming to offer $1,400 checks to people born in specific years. Many of these ads use AI-generated videos, according to the American Consumer Union.
This is not the first such case. Meta's advertising practices have been under global scrutiny since last year when Reuters published internal documents indicating that the company was making billions of dollars from advertisements promoting scams and prohibited goods. The report also showed that Meta's internal operations sometimes made it difficult for its employees to combat malicious advertisers.
The American Consumer Union's lawsuit goes even further, stating that Meta claims to be doing everything it can to eliminate fraudulent advertising, but in reality follows a policy that says: "Instead of banning advertisers that it sees as posing a greater risk to its users (as other tech companies like Google do), Meta only charges higher fees to those advertisers. The result is that the more dangerous the advertiser, the more Meta profits."
For its part, a Meta spokesperson denied these allegations, saying they "misrepresent the reality of our work and we will fight them," emphasizing that the company aggressively combats fraud on its platforms to protect individuals and businesses. The spokesperson added that Meta removed more than 159 million fraudulent ads last year alone, 92% of which were removed before any user reported them, and shut down 10.9 million Facebook and Instagram accounts linked to criminal fraud hubs.
The spokesperson concluded by saying, "We are fighting fraud because it is harmful to business – people don't want it, advertisers don't want it, and we don't want it either."
