Meta Allowed and Profited From Scam Ads, Lawsuit Claims

The suit accuses the company of earning 10 percent of its profits from ads on Instagram and Facebook that it knew were high-risk

Jessica McMaster,

AARP

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Published April 24, 2026

Samuel Boivin/NurPhoto via Getty Images

The Consumer Federation of America (CFA), a nonprofit advocacy group, has filed a lawsuit against Meta, accusing the tech giant of misleading users about the extent of scam advertising on Facebook and Instagram, as well as its efforts to combat it.

The complaint — filed Tuesday under the District of Columbia’s Consumer Protection Procedures Act — argues that, despite Meta’s public assurances that it actively removed and limited fraudulent ads, its policies and practices allowed scam advertising to flourish.

CFA also alleges that the company profited from the ads by charging higher rates to advertisers it identified as higher risk. The complaint cites an internal Meta document that reveals more than 10 percent of the company’s revenue came from high-risk ads.

How scam ads work

It’s not uncommon for scammers to impersonate real companies or use AI to create professional-looking (but bogus) shopping sites. You might be scrolling through your social media feed when a “deal” appears offering a big discount. But if you click on a scam ad, it can take you to a website where criminals could steal your information. Or the ad may include links with malware that infects your device and harvests personal information for identity theft.

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Here’s what you can do to help protect people 50 and older from scams and fraud:

Tell lawmakers to stop criminals from using crypto kiosks to steal from us.
Sign up to become a digital fraud fighter to help raise awareness about the latest scams.
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If you pay for the product, it could be fake or of poor quality, or you might not receive it at all. (Learn more about shopping scams.)

While there are ways to avoid these schemes (see tips below), Ben Winters, director of AI and Privacy at CFA, tells AARP that Meta has a responsibility to protect consumers: “It shouldn’t be on the individual users to be constantly ducking and investigating whether a paid advertisement on a platform is legitimate,” he says.

The lawsuit also accuses Meta of routinely ignoring users’ reports of scams on its platforms.

These allegations aren’t new.

Last year The Wall Street Journal reported on the issue, speaking with current and former employees who told the newspaper that the company was aware of the scam ads but reluctant to take action that would result in a loss of ad revenue. The Journal also uncovered an internal document showing that Meta allowed advertisers up to 32 automated “strikes” for fraud before issuing a ban.

Meta’s response

Meta provided the following statement to AARP in response to questions about the lawsuit:

“These allegations misrepresent the reality of our work, and we will fight them. We aggressively combat scams across our platforms to protect people and businesses — last year alone, we removed over 159 million scam ads, 92 percent 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. We fight scams because they are bad for business— people don’t want them, advertisers don’t want them, and we don’t want them either.”

CFA is seeking to recover damages from Meta on behalf of those harmed by the ads, calling Meta’s profits “illegal.”

Tips to protect yourself

The FTC advises:

Look up the seller before you click. Don’t assume the seller is the company whose brand name appears in the ad. Look closely to see if you can tell who the seller really is. Then, search that company’s name online, adding words like “scam,” “complaint” or “review.” Check what others are saying about the seller before you click on the ad.
Compare prices. If an ad offers a product for an unusually low price, it’s probably a scam.
Use a credit card. Credit cards offer the strongest consumer protections. If you don’t get what you ordered or never get the product, you can dispute the charge. Never buy anything from online sellers who insist you can only pay with gift cards or cryptocurrency.

More resources

Stay up on the latest scams and learn ways to protect yourself from fraud at AARP’s Fraud Resource Center and by listening to the award-winning The Perfect Scam podcast. AARP also has a free Helpline (877-908-3360); trained specialists provide guidance on what to do next and how to avoid scams.