A U.S. consumer watchdog group has filed a class-action lawsuit against Meta Platforms, alleging the company profited from scam advertisements on Facebook and Instagram.

The complaint, filed Tuesday in Superior Court in Washington, D.C., by the Consumer Federation of America (CFA), claims the social media giant “has knowingly taken steps and adopted policies that pad its bottom line at the expense of its users’ safety and well-being.” 

The lawsuit seeks damages on behalf of local consumers and calls for a jury trial.

The case draws on a previous Reuters report that cited internal Meta documents detailing the scale of scam ads on its platforms. According to those documents, about 10% of Meta’s overall 2024 sales, roughly $16 billion, came from online ads tied to scams and banned goods.

Internal documents also indicated Meta disbanded a China-focused anti-fraud team after it cut Chinese scam ads by 50 percent during testing. The documents also said users submit roughly 100,000 fraud reports per week, with about 96% reportedly ignored or rejected.

The lawsuit alleges Meta failed to adequately block risky advertisements while charging such advertisers higher rates, effectively profiting from fraudulent activity. It also accuses the company of creating a “false impression of safety” by downplaying the extent of scams on its platforms.

“Meta has, as a matter of company policy, deliberately profited from rampant, inexcusable harm to users on its platforms,” said Sarah Kay Wiley, attorney and managing director at Tech Justice Law. 

“Meta told its users it was fighting fraud. Internally, it was charging scammers a premium for access to those same users. That is not a failure of enforcement, that is a business model built on predatory deception,” she added. 

CFA Director of AI and Data Privacy Ben Winters said the company has prioritized profit over user protection. “As Americans lose more and more money to online scams, Meta has consistently chosen to prioritize profit over the safety of their users,” he said.

Meta denied the allegations and said it plans to contest the lawsuit. “These allegations misrepresent the reality of our work and we will fight them,” the company said in a statement, adding that it “aggressively combats scams.”

Meta said it has taken steps to address fraud, including expanding advertiser verification measures and restricting financial services ads that direct users to private messaging platforms, a tactic often used by scammers.

The company also said it removed more than 159 million scam ads last year, with 92% taken down before being reported, and shut down 10.9 million accounts linked to criminal scam operations across Facebook and Instagram.