A California county has sued social media giant Meta, alleging the company profits from fraudulent ads on Facebook, Instagram and WhatsApp.
The complaint, filed May 11 in Santa Clara Superior Court, alleges Meta tracks about 15 billion fraudulent ads and earns roughly $7 billion a year in internal “violating revenue,” according to reporting based on the filing and Reuters investigations.
Reuters reported that internal Meta documents estimated scam and banned-goods ads could account for about 10% of the company’s 2024 revenue. The complaint also cites internal materials suggesting Meta’s platforms played a role in a large share of consumer scams in the U.S. “Meta has a serious problem with scam ads,” according to the filing.
According to Reuters, Meta’s internal systems reportedly remove advertisers when it’s “automated systems predict the marketers are at least 95% certain to be committing fraud.” Suspected scammers below that threshold may instead be charged more to keep running ads.
“Meanwhile, Meta has declined to implement universal advertiser verification,” according to the filing, “a proven, cost-effective process that would require Meta to verify the identities of all advertisers on its platforms.”
The complaint, which lays out specific stories of how victims were damaged, alleges that Meta’s AI tools help scammers test deceptive ad variations. It also claims that the social media giant’s tools target users who have engaged with scam content and push ads for fraudulent financial products, cryptocurrency schemes, fake cures, ineffective supplements and celebrity impersonation scams. The county suit comes amid other consumer litigation targeting Meta over scam ads.
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Many organizations use Meta’s advertising platforms for recruitment marketing and employer brand campaigns. If Meta’s ad review systems are as compromised as the complaint alleges, it could mean HR and talent acquisition teams are participating on a platform where scam content competes alongside their legitimate messaging.
This could erode trust with the candidates and employees that hiring teams are trying to reach. The filing also states that “in 2023, Meta laid off the entire team investigating scam ads that were hurting legitimate brands.” The filing also alleges that even after Meta had laid off one anti-scam team in 2023, disbanded another in 2024 and refused to implement universal advertiser verification, the company posted in December 2025 that “we’re expanding our advertiser verification efforts.”
Santa Clara County Counsel Tony LoPresti is seeking civil penalties, restitution for California residents who lost money to scams allegedly facilitated by Meta’s systems and court-ordered changes to the company’s business practices. Local reporting describes it as the first of its kind, brought by a local civil prosecutor rather than a state attorney general.
Meta denied the allegations, saying they “misrepresent the reality of our work,” and said it would fight the lawsuit, according to reporting by CBS News. The company also said it removed more than 159 million scam ads in 2025.
Meta also said it has been taking legal action against scam advertisers and described a broader effort to disrupt fraudulent activity across its platforms, including Facebook and Instagram. In its February 2026 newsroom post, the company said it works to remove scam ads, deploy protective tools and coordinate with law enforcement.
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