Meta is facing a lawsuit from the Consumer Federation of America, which accuses the company of misleading users about its handling of fraudulent ads on Facebook and Instagram.
The complaint argues that Meta allowed scam ads, which also included illegal gambling promotions, in violation of consumer protection laws. The case focuses on deceptive advertising, rather than outright fraud, highlighting examples such as fake government payments, “free iPhone” offers, and other misleading ads found in Meta’s ad library.
Meta from its side is rejecting the claims. Spokesperson Chris Sgro said, that “these allegations misrepresent the reality of their work and they will fight them.”
As indicated by Ben Winters, it is still easy to find objectionable ads in general. For example, when he looked for ads associated with terms such as ‘free phone’ and ‘stimulus check’, he found many advertisements that were questionable. An investigation also found that many active advertisements are being promoted in a way that directs users to questionable financial schemes. However, Meta has not provided any guidance as to whether or not these types of advertisements would be in violation of their policies.
The CFA is looking for compensatory damages, return of alleged profits, and modification of Meta’s enforcement of their advertising policies. According to Winter, stricter enforcement will help to stop repeat offenders and prevent misleading advertisements from reaching users before they see them.
Spokesperson Chris Sgro said:
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.
The large size of Meta has attracted increased scrutiny. Facebook, Instagram, and WhatsApp are among the largest social networks in the United States, providing advertisers with a large audience. Reportedly, according to internal documents, Meta platforms comprise a significant amount of world’s online scams, and one estimate claims that it is “much easier to advertise scams on Meta platforms compared to Google.” According to another internal source, approximately 10.1% of the overall revenue, which amounts to approximately $16 billion, is attributable to scam-related or prohibited advertising. Meta has described this as “a very rough estimate and overly broad.”
