Meta is facing yet another major legal challenge over scam advertisements running across Facebook and Instagram. This time, the lawsuit comes from California’s Santa Clara County, which accuses the tech giant of knowingly benefiting from what officials described as a massive ecosystem of fraudulent ads targeting elderly and vulnerable users.
The lawsuit was filed by County Counsel Tony LoPresti, who argued that Meta allowed deceptive advertising practices to thrive because the scam campaigns generated huge amounts of advertising revenue. According to the complaint, scammers allegedly used Facebook and Instagram to push fake offers, misleading financial schemes, and fraudulent celebrity-backed promotions that tricked users into handing over money or personal information. The filing claims the issue became so widespread that it evolved into a profitable system rather than isolated moderation failures.
One of the most explosive parts of the lawsuit references a previous Reuters investigation that reportedly uncovered internal documents showing how heavily scam advertisers relied on Meta’s platforms. According to the filing, Meta may earn billions annually from such advertising activity. Santa Clara County argues that the company’s ad-review systems and enforcement policies were either ineffective or too weak to stop repeat offenders from continuously returning to the platform.
During a press conference, LoPresti strongly criticized the company, saying Silicon Valley cannot simply ignore the damage caused by technology firms operating inside the region. He argued that while the Bay Area has benefited enormously from the tech industry financially, companies should still be held accountable when vulnerable people are allegedly being harmed through systems designed to maximize advertising profits.
Meta has firmly pushed back against the allegations. In its public response, the company said it intends to fight the lawsuit and accused critics of misrepresenting the company’s efforts to combat scams. A Meta spokesperson stated that scams are harmful not only to users but also to businesses relying on Meta’s platforms, which is why the company claims it aggressively removes fraudulent advertisements and works closely with global law enforcement agencies.
According to Meta, more than 159 million scam ads were reportedly removed from its platforms last year alone. The company also highlighted investments in new detection tools and anti-fraud systems designed to identify suspicious advertising behavior more quickly. Still, critics argue the scale of scam advertising on Facebook and Instagram continues to suggest deeper systemic problems that moderation tools alone are not fixing.
The timing of the lawsuit is especially damaging because Meta is already facing mounting pressure from advocacy organizations and consumer groups over the same issue. Just this week, the Center for Countering Digital Hate released a report focused on Medicare-related scam advertisements allegedly targeting senior citizens on Facebook. The report claimed Meta generated millions of dollars in revenue from those campaigns despite many advertisers repeatedly violating platform rules.
According to the watchdog group, scammers often used fake AI-generated celebrity endorsements and misleading health-related messaging to target older users who were more likely to trust familiar public figures. The report alleged that some advertisers continued returning to the platform even after having previous ads removed, raising concerns about whether enforcement systems are truly preventing repeat abuse.
This is also not the only legal action Meta is currently dealing with regarding fraudulent advertising. Last month, the Consumer Federation of America filed a proposed class-action lawsuit accusing the company of violating consumer protection laws through its handling of scam ads. That lawsuit reportedly pointed toward fake promotions involving “free” iPhones and fraudulent government payment offers as examples of misleading campaigns users encountered on Facebook.
The broader controversy highlights a growing issue facing nearly every major social media company right now. Platforms built around targeted advertising increasingly struggle balancing massive ad revenue systems with meaningful moderation and fraud prevention. As AI-generated content becomes easier to create, scammers are also becoming more sophisticated, using fake videos, cloned celebrity voices, and realistic-looking promotional material that can fool even careful users.
For Meta, the concern is no longer just public criticism — it is becoming a legal and regulatory problem. Multiple lawsuits arriving within months of each other could increase pressure on lawmakers and regulators to push for stricter oversight of digital advertising systems, especially when scams involve elderly users or financial fraud. Right now, the company appears to be entering another difficult phase where questions about platform safety are once again starting to overshadow its business growth and AI ambitions.
