Meta is facing a lawsuit regarding fraudulent advertisements on Facebook and Instagram, following the disclosure of internal documents that indicate an anticipated $16 billion in revenue from fraud.

      In summary, Meta is contending with a series of lawsuits throughout the US, Australia, and the UK, which claim the company knowingly benefited from scam advertisements on Facebook and Instagram. Internal documents from Meta indicate that approximately 10% of its projected revenue for 2024—around $16 billion—originated from fraudulent advertising. These lawsuits encompass a variety of fraudulent activities, including a $500 million pump-and-dump scheme, deepfake celebrity endorsements, impersonation of financial professionals, and cryptocurrency scams, with leaked assessments revealing that Meta estimated scam-related revenue would surpass any regulatory settlement costs.

      Meta is confronted with numerous lawsuits, class actions, and regulatory inquiries regarding scam ads on its platforms, which, based on its internal analyses, brought in about $16 billion in revenue for 2024, equating to around 10% of its total advertising earnings. These legal challenges span across the US, Australia, and the UK, collectively alleging that Meta profited from fraudulent ads, including AI-generated deepfake endorsements, pump-and-dump stock schemes, fake investment platforms, and unauthorized impersonations of financial experts. Critics also argue that Meta operated insufficient ad moderation systems that were either inadequate to prevent fraud or intentionally weakened to safeguard its revenue.

      The most significant financial case, lodged in February in the US District Court for the Northern District of California, claims Meta facilitated a pump-and-dump scheme involving Jayud Global Logistics, a Chinese stock listed on Nasdaq. According to the lawsuit, scammers acquired 50 million shares at discounted prices in December 2024, subsequently using targeted ads on Facebook and Instagram to inflate the share price to nearly $8 before selling their shares in April 2025, leading to over $500 million in consumer losses. A California federal judge dismissed the class action on March 25, determining that the plaintiffs did not sufficiently demonstrate that Meta “co-created” the ads, although the dismissal appeared to be without prejudice.

      Across various jurisdictions, another lawsuit filed by Scott+Scott on behalf of financial professionals John Suddeth and Sara Perkins alleges that Meta enabled scammers to exploit their identities in paid advertisements, resulting in client diversion, reputational damage, and regulatory scrutiny. A bipartisan group of US state attorneys general had previously cautioned Meta in June 2025 about impersonation ads and fraudulent WhatsApp investment groups being utilized for widespread scams. The complaint states that similar impersonation ads continued to run even after the warning was issued.

      In December, the Attorney General of the US Virgin Islands filed a lawsuit in Superior Court against Meta, alleging that the company “knowingly profited” from scam ads and even “charged fraudsters extra for the right to advertise scams” instead of removing them. This lawsuit aligns with actions taken by 42 other state attorneys general against Meta, primarily concerning child safety but increasingly overlapping with issues of advertising fraud. In April, New York Attorney General Letitia James issued an investor alert specifically regarding investment scams targeting Meta platforms.

      In Australia, the Competition and Consumer Commission has been pursuing Meta in federal court since March 2022 over cryptocurrency scam ads featuring the likenesses of businessman Dick Smith, television presenter David Koch, and former New South Wales premier Mike Baird. One victim reported a loss exceeding A$650,000. Meta's attempt to have the case dismissed was unsuccessful in 2023. In the UK, the Financial Conduct Authority discovered 1,052 illegal financial advertisements on Meta platforms within a single week in November 2025. A major UK bank noted that 80% of its fraud cases stemmed from Meta platforms, with Facebook Marketplace accounting for 60% of purchase fraud, Instagram for 67% of investment fraud, and WhatsApp impersonation scams increasing by 300% year-on-year. According to UK Finance, Meta platforms were linked to 61% of all authorized push payment scams in the UK, resulting in criminals stealing £485.2 million.

      The enormity of the problem is highlighted by Meta’s own internal documents. A Reuters investigation released in November 2025 indicated that Meta anticipated that 10% of its global revenue for 2024—approximately $16 billion—would derive from scam and fraud-related advertising. The company reportedly served around 15 billion “higher risk” scam ads daily, with an estimated 19% of its ad revenue from China (around $3 billion) associated with scams. Internal communications revealed that when enforcement personnel suggested shutting down fraudulent accounts, Meta requested assurances that “growth teams would not object due to the revenue implications.” A follow-up Reuters report in January uncovered that Meta had created an internal “playbook” to manage regulators and had altered its ad library to obscure scam ads.

      Rob Leathern, Meta's former senior director of product management who oversaw business integrity operations, commented on the findings, saying, “The levels that you’re talking about are not defensible.” Meta characterized the Reuters projections as “a rough and overly inclusive estimate,” asserting that the documents present “a selective view