Santa Clara County files lawsuit against Meta over alleged $7 billion scam ad revenue

Santa Clara County has initiated legal proceedings against Meta, alleging the social media giant profits from a vast ecosystem of fraudulent advertisements on Facebook and Instagram that target senior citizens and other vulnerable individuals. The lawsuit, filed by County Counsel Tony LoPresti, asserts that the company generates up to $7 billion annually from these deceptive campaigns and that its internal policies inadvertently facilitate the scams.

This legal action represents the first instance of a local civil prosecutor bringing a specific case of this nature against Meta. The filing relies heavily on a report from Reuters, which cited internal documents detailing the billions of dollars poured into Meta's platforms by scam advertisers. LoPresti emphasised that while the region has benefited from the tech boom, the county cannot remain passive while a major corporation allegedly swindles the public to meet revenue targets.

In response to the allegations, a Meta spokesperson stated the company would vigorously fight the lawsuit. The spokesperson argued that the claims rely on reporting that distorts the company's motives and ignores the extensive daily actions taken to combat fraud. Meta maintained that it aggressively fights scams on and off its platforms because they are detrimental to users and the businesses that rely on their services.

Supporting their defence, the company highlighted that it removed over 159 million scam ads last year alone. Furthermore, Meta noted it has launched new protective tools and partnered with law enforcement globally to disrupt criminal networks. The company described scammers as determined criminals who utilise increasingly sophisticated tactics to defraud people and evade detection across the internet.

The lawsuit arrives amidst heightened scrutiny of Meta's handling of fraudulent advertisers. Earlier this week, the Center for Countering Digital Hate published a report on Medicare-related scam ads on Facebook, finding the company had made more than $14 million from such schemes, many involving repeat offenders whose ads had previously been removed. These reports noted the use of tactics such as fake AI-generated celebrity endorsements to evade detection.

This development follows a separate class-action lawsuit filed last month by the Consumer Federation of America in Washington D.C. That suit claimed Meta broke consumer protection laws by allowing ads promoting fraudulent offers, including free iPhones and $1,400 checks. As the Santa Clara case proceeds, the outcome remains uncertain, though it adds significant pressure to Meta's ongoing efforts to balance advertising revenue with platform safety.