Santa Clara County sues Meta over scam ads on Facebook and Instagram

The complaint, filed on behalf of California residents, alleges Meta earns up to $7bn a year from “high-risk” scam ads and tolerated the practice. The county wants restitution, civil damages, and an injunction.

Santa Clara County has sued Meta Platforms in California state court, alleging the company profits from scam advertising on Facebook and Instagram in violation of California’s false-advertising and unfair-business-practices laws.

The lawsuit, filed on Monday in Santa Clara County Superior Court on behalf of all California residents, alleges that Meta earns as much as $7bn in annual revenue from advertisements that bear clear signs of fraud.

The complaint says Meta “largely tolerated” the misconduct and established internal guardrails to block scam-reduction efforts that cost the company too much money.

The county also alleges that Meta allowed middlemen to sell ad accounts that were protected against enforcement and that the company targeted scam ads at users who had clicked on similar fraudulent listings before.

The complaint draws on internal documents first reported by Reuters in November 2025, which indicated that Meta’s own projections expected more than 10% of its 2024 annual revenue, roughly $16bn, to come from advertising scams and banned goods.

Earlier private litigation from the Consumer Federation of America cited the same set of documents.

The lawsuit seeks restitution for affected California residents, civil damages and an order prohibiting Meta from continuing the alleged practices.

Meta did not immediately respond to a request for comment. The company has previously said it removes scam content and has dedicated teams working to enforce its policies.

In April it filed its own lawsuits against advertisers involved in celebrity-impersonation scams.

Santa Clara County’s complaint is the latest in a multi-front legal challenge over Meta’s advertising platform.

A class-action filed in Washington, DC, by the Consumer Federation of America covers similar ground. Japanese regulators, the UK’s Online Safety Act enforcement team and the Australian Competition and Consumer Commission have all opened parallel inquiries into scam-advertising practices across the company’s platforms in the past twelve months.

The Santa Clara case is being handled by the county counsel’s office, and a scheduling order is expected within thirty days.