Santa Clara County sues Meta over alleged scam ads

Santa Clara County leaders are suing Meta, alleging the company has engaged in a worldwide, systematic campaign to litter vulnerable Facebook and Instagram users’ feeds with billions of scam ads by fraudulent companies.

The lawsuit filed Monday alleges that instead of cracking down on deceptive ads designed to trick users out of their money, Meta has hamstrung its own fraud prevention teams and helped fake companies bypass its filters to enable the tech powerhouse to enjoy an estimated $7 billion in ad revenue from the scams every year.

“There can be no confusion about it — Meta is on the take,” County Counsel Tony LoPresti said at a Monday news conference announcing the lawsuit. “This case is about accountability — it’s about ensuring that as behemoth tech companies open up new frontiers in our society, they aren’t lawless frontiers. Meta has lied to its users and violated the law for years.”

The county lawsuit seeks attorney fees and a ruling barring Meta from further alleged violations of false advertising and unfair competition laws. Much of the lawsuit’s allegations stem from a 2025 Reuters investigation suggesting Meta was at one point involved in one-third of all successful Internet scams in the U.S.

The company has vowed to fight the lawsuit.

“This claim relies on Reuters reporting that distorts our motives and ignores the full range of actions we take to combat scams every day,” a spokesperson for the company told San José Spotlight. “We aggressively fight scams on and off our platforms because they’re not good for us or the people and businesses that rely on our services.”

The county lawsuit alleges scammers who generated significant advertising revenue remained on the platform despite being flagged more than 500 times. More notably, the lawsuit alleges Meta sets “revenue guardrails” to protect profits from scam ads. This was allegedly done through policies preventing Meta’s team that vets advertisers from restricting scam ads if it would cost the company more than 0.15% of its total revenue.

“What we’ve seen is a lot of financial scams, cryptocurrency scams, people impersonating famous folks or military personnel, asking folks for money, advertising miracle cures for incurable diseases,” LoPresti said. “Meta is taking very deliberate measures to make sure many of those scam ads get through, and charging a premium price to scammers to post those ads.”

County officials said their lawsuit is the first of its kind in California and the first brought by a local civil prosecutor in the U.S. Santa Clara County sits at the heart of Silicon Valley and is home to the headquarters of tech titans such as Apple and Google. Meta is headquartered in Menlo Park in San Mateo County.

“While our region has certainly benefited from the tech boom, we can’t sit idly by when we know good and well that a tech giant is swindling the public to hit a revenue target,” LoPresti said. “Tech might be the lifeblood of Silicon Valley … but we can’t allow poison into that bloodstream.” 

The company argues it’s removed more than 159 million scam ads last year and launched new tools and law enforcement partnerships to disrupt fraudsters.

“We will fight this lawsuit,” the spokesperson said.

Contact Brandon Pho at [email protected] or @brandonphooo on X.