Santa Clara County has filed a lawsuit against Meta, alleging the company has profited from a “vast ecosystem of scam ads” on Facebook and Instagram that defraud vulnerable individuals, particularly senior citizens. County Counsel Tony LoPresti stated the lawsuit marks the first case of its kind brought by a local civil prosecutor.
The lawsuit cites a report from Reuters that claims scam advertisers have spent billions on Meta’s platforms, with the company potentially earning up to $7 billion annually from these advertisements. The filing contends that Meta’s processes and policies allow such scams to persist.
LoPresti emphasized the county cannot ignore the actions of a tech company that is taking advantage of the public for revenue. “While our region has certainly benefited from the tech boom, we can’t sit idly by when we know good and well that a tech giant is swindling the public to hit a revenue target,” he said at a press conference.
In response, a Meta spokesperson announced the company intends to contest the lawsuit, stating that the claims misrepresent the company’s motives and overlook its efforts to combat scams. “This claim relies on Reuters reporting that distorts our motives and ignores the full range of actions we take to combat scams every day,” the spokesperson said. Meta reports having removed over 159 million scam ads last year and has implemented new tools designed to protect users from fraudulent content.
A recent report from the Center for Countering Digital Hate (CCDH) indicates that Meta has made more than $14 million from Medicare-related scams on Facebook. Many of these scams involved repeat offenders whose ads had previously been removed. The scams reportedly used various tactics, including fake AI-generated celebrity endorsements, to lure victims.
Meta reiterated its commitment to combating scams, stating, “Scammers are determined criminals who use increasingly sophisticated tactics to defraud people and evade detection on our platforms and across the internet.” The company stated it aggressively fights scams as they harm both its reputation and the businesses that depend on its services.
In addition to the Santa Clara lawsuit, last month, the nonprofit Consumer Federation of America (CFA) filed a proposed class action lawsuit in Washington D.C., accusing Meta of violating consumer protection laws related to scam ads promoting “free” iPhones and $1,400 checks.
