Consumer group sues Meta over scam gambling ads

• The Consumer Federation of America has filed a class-action lawsuit against Meta in Washington, D.C., alleging the company knowingly profited from illegal gambling and other scam advertisements.
• Internal Meta documents cited in the complaint, reported by Reuters, show the company estimated more than 10% of its 2024 ad revenue could come from scam-related advertising.
• Meta has denied the allegations, saying they misrepresent its enforcement efforts and pointing to the removal of over 159 million scam ads in the past year.

The Consumer Federation of America (CFA) has filed a class-action lawsuit against Meta Platforms in the Superior Court of the District of Columbia, alleging the Facebook and Instagram parent knowingly profited from advertising linked to illegal gambling operations and other fraudulent schemes.

The complaint, filed in late April, accuses Meta of misleading users through public commitments to combat scam advertising, commitments the CFA argues were contradicted by the company’s internal policies and practices.

Revenue from scams

The CFA’s complaint draws on internal Meta documents, surfaced in Reuters reporting, which the company reportedly used to estimate that more than 10% of its 2024 ad revenue would come from scam advertisements, illegal gambling promotions, and the sale of prohibited goods.

Meta has since characterized that figure as a rough, overly broad estimate rather than a confirmed realized amount. The CFA places the dollar value at approximately $16 billion, a sum it notes coincides with total losses Americans reported from online scams in the same year.

The complaint further alleges that rather than removing advertisers identified internally as high-risk, Meta charged those advertisers a premium rate, a characterization Meta has not directly addressed. The CFA argues that Meta’s terms of service and community standards contain misleading assurances, including commitments to take “appropriate action” against misuse and to remove content linked to fraud.

Those representations, the group contends, constitute a violation of the DC Consumer Protection Procedures Act.

Ben Winters, director of AI and data privacy at the CFA, said:

“As Americans lose more and more money to online scams, Meta has consistently chosen to prioritize profit over the safety of their users. Congress has failed to hold Meta accountable, the Trump Administration has become a Big Tech lobbying firm, and State AGs are stretched thin. Today, CFA is choosing direct action to protect DC residents, and will continue to champion protecting all consumers from the devastating harms of online scams.”

The proposed class covers DC-based Meta users. The CFA is seeking recovery of consumer financial damages, disgorgement of profits derived from scam advertising, and injunctive relief to prevent further violations.

Meta’s response

A Meta spokesperson rejected the allegations, saying the claims misrepresent the company’s enforcement work. The company states it removed over 159 million scam ads in the past year, with 92% taken down before any user report was filed, and disabled nearly 11 million accounts linked to criminal scam networks.

Meta says it continues to invest in technologies targeting investment fraud and celebrity-bait schemes, and that it is expanding its advertiser verification program.

This is not the first time Meta has faced legal action over fraudulent advertising. A federal class-action filed in California alleged users were defrauded through ads on the platform; the 9th Circuit Court of Appeals revived portions of that case after a lower court dismissed it.

The DC lawsuit arrives months after a Paris court ruling in January 2026 that ordered Meta to take stronger action against unlicensed casino advertising across Facebook, Instagram, and Messenger. Regulators in the Netherlands, the UK, Malaysia, and Brazil have each raised concerns about the company’s handling of illegal gambling promotions in recent years.

For the regulated gambling industry, the case crystallizes a persistent problem: unlicensed operators are gaining access to millions of consumers through mainstream advertising channels, while licensed operators work under strict marketing restrictions.

A successful outcome for the CFA could set a legal precedent compelling platforms to apply meaningful enforcement, rather than pricing scam advertising as an acceptable revenue category.