Meta faces a new lawsuit over fake ads on Facebook and Instagram that promise free phones and payouts. The incident has raised concerns about ad moderation, user safety, and the effectiveness of platform policies. Facebook, Instagram, and WhatsApp are among the most widely used online platforms worldwide, and Meta facing this scrutiny was just a matter of time.
A US-based consumer advocacy group has reportedly filed a lawsuit against Meta, claiming that the company has failed to control scam-related ads on its platforms, Instagram, Facebook, and WhatsApp. It has violated Washington DC’s consumer protection laws.
The Consumer Federation of America (CFA), in its lawsuit, claimed that Meta allowed misleading ads to circulate widely while also profiting from them despite publicly stating it takes action against fraud and scams.
The company’s internal documents projected that 10% of 2024 revenue, roughly $16 billion, came from fraudulent advertising, according to The Wired.
The complaint focuses on ads that allegedly promote deceptive schemes, including offers tied to government payouts and free devices. These ads are widely recognized as common scam formats and continue to appear across Meta’s platforms. The group argued that these ads mislead the users and expose them to financial risks.
The report also mentioned that CFA claimed that questionable ads can still be found through simple keyword searches, prompting calls for stricter oversight and better pre-screening mechanisms. Now, the organization is seeking damages and changes in how Meta reviews and manages ads.
Meta has clearly denied the allegations, stating that they do not accurately represent its efforts to tackle fraud activity.
“We aggressively combat scams across our platforms to protect people and businesses - last year alone, we removed over 159 million scam ads, 92% of which we took down before anyone reported them, and took down 10.9 million accounts on Facebook and Instagram associated with criminal scam centers,” the company said as quoted by The Wired.
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Meta’s multiple lawsuits across the US, Australia, and the UK indicate that the future of digital advertising will depend on stronger regulation, improved AI moderation, and greater transparency. As platforms face rising scrutiny, balancing personalization with user safety will be critical. It is expected that companies will adopt ethical ad practices as they rebuild trust and long-term sustainability in the digital ecosystem.