Meta Platforms is facing a coordinated wave of scam ads lawsuits over Facebook and Instagram, with plaintiffs including the Santa Clara County Counsel, the Consumer Federation of America, impersonated financial professionals, Australian mining magnate Andrew Forrest, and individual Facebook users. The suits share a central claim: that Meta knowingly profits from fraudulent advertising and misleads the public about how aggressively it polices its platforms. Several cases have already survived Section 230 dismissal motions, clearing the way for discovery and trial.
The Factual Spine: Reuters Documents and the 10% Figure
Most of the current litigation leans on the same evidence. In November 2025, Reuters reported on internal Meta documents from 2021 to 2025 indicating the company projected roughly 10% of its 2024 advertising revenue — about $16 billion — came from ads promoting scams and banned goods, including fraudulent e-commerce, illegal online casinos, and prohibited medical products.1CNBC. Meta Reportedly Projected 10% of 2024 Sales Came From Scam Fraud Ads A “higher risk” subcategory of clearly deceptive ads was estimated at about $7 billion in annualized revenue, with Meta showing an estimated 15 billion of these ads to users every day.2Marketing Brew. Meta Scammy Ads Reuters Report
The documents also describe how Meta’s systems treat suspected scammers. Automated enforcement reportedly required 95% certainty that an ad was fraudulent before banning the advertiser. Those who fell below that threshold were charged higher ad rates instead, a practice critics have called a “penalty bid.” Internal “revenue guardrails” reportedly prevented Meta’s scam-detection team from taking any action that would reduce revenue by more than 0.15%. An April 2025 internal assessment concluded that “it is easier to advertise scams on Meta platforms than Google.”3Information Age (ACS). Meta Relies on Scam Ads for 10% of Its Revenues, Internal Audit
Meta spokesperson Matthew Tye called the 10% figure “a rough and overly-inclusive estimate” and said the leaked documents present a “selective view that distorts Meta’s approach to fraud and scams.” The company said later reviews determined many flagged ads did not violate its policies.1CNBC. Meta Reportedly Projected 10% of 2024 Sales Came From Scam Fraud Ads
Santa Clara County v. Meta
On May 11, 2026, the Santa Clara County Counsel’s Office filed a civil prosecution action against Meta in Santa Clara County Superior Court on behalf of the People of the State of California. The complaint alleges Meta “knowingly and actively” exposes consumers to a “deluge of scam advertisements” while falsely promising the public it is taking aggressive steps against fraud.4Santa Clara County Counsel. Protecting Public Against Scams on Meta’s Social Media Sites
Brought under California’s Unfair Competition Law and False Advertising Law, the suit alleges Meta earns billions from scam ads while using systems that let suspected scammers keep running ads for a premium fee unless they cross the 95% certainty threshold. It also claims Meta’s generative AI tools help scammers build advertisements and that the company uses a network of advertising middlemen, particularly in China, who resell access to protected ad accounts.5The Guardian. Meta Scam Ads California Lawsuit
The county seeks an injunction, civil penalties, and restitution for consumers, with particular emphasis on harm to older adults. County Counsel Tony LoPresti is working with three outside firms — Bernstein Litowitz Berger & Grossmann, Bishop Partnoy, and Renne Public Law Group — on a contingency basis. Meta spokesperson Andy Stone said the company “aggressively fights scams” and called the allegations a distortion of its motives.5The Guardian. Meta Scam Ads California Lawsuit
Consumer Federation of America Class Action
Weeks earlier, in April 2026, the Consumer Federation of America filed a class action against Meta in the Superior Court of Washington, D.C. The CFA alleges Meta violated D.C. consumer protection law by profiting from fraudulent advertising while misleading users about platform safety.6CBS News. Meta Lawsuit Scams Facebook The complaint cites the same internal documents, including the daily 15-billion higher-risk ad estimate and the $16 billion annual revenue projection.7Reuters. Consumer Watchdog Group Files Suit Alleging Meta Profited From Ads for Scams
The CFA seeks damages and disgorgement of profits it says Meta earned illegally from scam advertisers. Meta responded: “These allegations misrepresent the reality of our work and we will fight them.”7Reuters. Consumer Watchdog Group Files Suit Alleging Meta Profited From Ads for Scams
Calise v. Meta and the Crack in Section 230
The legal foundation under the newer suits was built in Calise v. Meta, filed in 2021 by Christopher Calise and Anastasia Groschen. The plaintiffs alleged Meta knowingly hosted Chinese scammers’ deceptive ads, violating its own terms of service and community standards.
The case was initially dismissed under Section 230 of the Communications Decency Act, which generally shields internet platforms from liability for third-party content. In June 2024, the Ninth Circuit Court of Appeals partially reversed, ruling that Section 230 is “not limitless” and does not protect Meta from breach-of-contract claims when the company has made specific promises to users about moderating fraudulent content. The court separated claims that would require Meta to act as a content editor (still shielded) from claims based on Meta’s failure to honor its own contractual commitments (not shielded).8U.S. Court of Appeals, Ninth Circuit. Calise v. Meta Platforms, Inc.
In September 2025, U.S. District Judge Jeffrey White denied Meta’s motion to dismiss the remaining contract claims, finding Meta’s Terms of Service and Community Standards contained “unambiguous and well-defined promises” about removing fraudulent content.9MediaPost. Judge Largely Sides Against Meta in Battle Over Scam Ads That ruling matters well beyond the parties. It gives plaintiffs in other scam-ad cases a template: frame the claim around Meta’s own promises, and Section 230 no longer ends the conversation.
Suddeth v. Meta: Impersonated Financial Professionals
A separate class action targets a different flavor of fraud. Filed in October 2025 in the Northern District of California, Suddeth v. Meta Platforms was brought by Scott+Scott Attorneys at Law on behalf of licensed financial professionals whose names, images, and credentials appeared in paid ads without their consent.10ClassAction.org. Suddeth et al. v. Meta Platforms Inc. et al. Complaint
Named plaintiffs John Suddeth and Sara Perkins, both Florida-based financial professionals, allege their likenesses were used in ads that falsely implied they endorsed thinly traded China-based securities. Users who clicked the ads were funneled into WhatsApp groups where scammers pressured them into purchases, in what the complaint describes as a pump-and-dump scheme. The suit brings claims under the Lanham Act for false endorsement, California and Florida right-of-publicity statutes, and California’s Unfair Competition Law, and argues that because Meta’s advertising tools helped create and distribute the impersonation ads, the conduct amounts to “commercial advertising” outside Section 230 immunity.10ClassAction.org. Suddeth et al. v. Meta Platforms Inc. et al. Complaint
Andrew Forrest v. Meta
Australian mining billionaire Andrew Forrest has been pursuing Meta since 2019, when he first discovered ads using deepfake videos of him to promote fraudulent cryptocurrency investments on Facebook. After an Australian criminal proceeding against Meta was discontinued in 2024, Forrest brought a civil suit in the Northern District of California.11FindLaw. Andrew Forrest v. Meta Platforms Inc.
In a June 2024 ruling, the court allowed Forrest’s misappropriation and negligence claims to proceed, finding that Section 230 does not provide an “impenetrable defense” when there is a factual dispute about whether Meta’s ad tools, including automated “mixing and matching” features, materially contributed to creating the scam content.11FindLaw. Andrew Forrest v. Meta Platforms Inc. As of early 2026, the litigation remained active, with a hearing pending on whether Meta improperly destroyed evidence.12ABC News Australia. Andrew Forrest Battles Meta Over Fake Ads
A Related Case: DZ Reserve v. Meta
One parallel case is worth flagging because it is often grouped with the scam-ad suits but addresses something different. DZ Reserve v. Meta, filed in 2018, is brought by advertisers alleging Meta inflated its “Potential Reach” metric by counting duplicate and fake accounts, making ad inventory look more valuable than it was.13Cohen Milstein. DZ Reserve et al. v. Facebook Internal documents cited in the filings include the question: “How long can we get away with the reach overestimation.”14CNBC. Facebook Knew Ad Metrics Were Inflated but Ignored the Problem, Lawsuit Claims The class was certified in 2022 and affirmed by the Ninth Circuit in 2024; the Supreme Court declined review in January 2025. A trial set for October 2025 was vacated due to a federal appropriations lapse, and no new date had been set as of December 2025. This case is about deceiving advertisers over audience size, not about scam ads shown to consumers, though it draws on the same theme of Meta prioritizing revenue over disclosure.
Who Else Is Pressing Meta
The private suits sit alongside heavy government pressure. In June 2025, a bipartisan coalition of 42 state and territorial attorneys general, led by New York AG Letitia James, sent Meta a formal letter demanding better review of investment advertisements and warning that if the company could not stop the scams, it should stop running investment ads altogether. The letter cited reports of users losing “hundreds of millions of dollars.”15New York Attorney General. Attorney General James Leads Bipartisan Coalition Urging Meta to Protect Users
In November 2025, U.S. Senators Richard Blumenthal and Josh Hawley wrote to the FTC and SEC urging formal investigations and, if warranted, enforcement actions that would “fully disgorge all profits from fraudulent advertisements” and “hold individual executives personally accountable.”16Senator Blumenthal. Blumenthal and Hawley Call for Federal Investigation of Meta’s Profiting From Scams and Fraud No formal federal investigation had been publicly announced as of mid-2026, though the FTC previously issued study orders to Meta and other platforms in March 2023 to collect data on how they screen ads for fraud.17Federal Trade Commission. FTC Issues Orders to Social Media and Video Streaming Platforms Regarding Efforts to Address Surge in Advertising Senators Ruben Gallego and Bernie Moreno introduced the bipartisan SCAM Act (Safeguarding Consumers from Advertising Misconduct) in February 2026, which would require online platforms to take “reasonable steps to prevent fraudulent and deceptive ads” and strengthen FTC and state AG enforcement authority.18Senator Gallego. Gallego, Moreno Introduce Bipartisan Bill to Crack Down on Online Scam Ads
In Europe, the European Consumer Organisation (BEUC) and 29 member groups filed complaints against Meta, Google, and TikTok with the European Commission in May 2026 under the Digital Services Act, alleging the platforms failed to address reported financial scam ads. Only 27% of nearly 900 flagged ads were actually removed, according to the complaint. DSA fines can reach up to 6% of a company’s global annual revenue.19PYMNTS. EU Consumer Groups File Complaints Against Google, Meta, and TikTok Over Online Financial Scams
Harm to older adults runs through many of these efforts. A Center for Countering Digital Hate report found Medicare scam ads on Facebook generated over 215 million views in a year, with the “vast majority” seen by older Americans; those ads used AI celebrity deepfakes and false “free benefits” offers. Meta reportedly earned an estimated $14.3 million from those specific Medicare scam advertisers alone.20Center for Countering Digital Hate. Meta Allowed Medicare Scammers to Generate More Than 215 Million Views on Ads, Mostly From Seniors
How Meta Is Defending Itself
Meta says it takes scam advertising seriously and points to enforcement numbers. The company reports it removed over 159 million scam ads in 2025, with 92% detected by its own systems before users reported them.21Meta. Fighting Scammers, Protecting People With New Technology and Partnerships In March 2026, Meta announced AI systems for detecting celebrity and brand impersonation scams and updated its ad content policy to require ad accounts be tied to a legitimate business or individual.22Platform Governance Archive. Meta Is Taking Measures to Prevent Scam Ads on Facebook and Instagram It also says it works with the FBI, the Royal Thai Police, and Britain’s National Crime Agency to disrupt organized scam networks.23The Record. Meta Scam Advertising Crackdown
In court, Meta has invoked Section 230 with mixed results. Courts have increasingly let claims proceed when plaintiffs frame their theories around Meta’s contractual promises, the role of its ad tools in generating scam content, or its direct financial benefit from fraud. In Calise, the company stated: “We believe the plaintiffs’ remaining claims are false and will continue to vigorously defend ourselves.”9MediaPost. Judge Largely Sides Against Meta in Battle Over Scam Ads On the Santa Clara and CFA suits, Meta has characterized the allegations as distortions and the Reuters reporting as cherry-picked.1CNBC. Meta Reportedly Projected 10% of 2024 Sales Came From Scam Fraud Ads
One detail from the leaked documents cuts to the plaintiffs’ core theory. According to reporting on the materials, Meta estimated potential fines of up to $1 billion but concluded those penalties would be significantly smaller than the revenue generated by the ads themselves.24Almanac News. Santa Clara County Files Lawsuit Against Meta Alleging Widespread Scam Ads The same documents disclosed that the SEC was investigating Meta over financial scam ads, though no public enforcement action has resulted.2Marketing Brew. Meta Scammy Ads Reuters Report Whether that calculus survives contact with a California jury, a D.C. court, and 42 state attorneys general is the question the next year of litigation will answer.