Santa Clara County today filed a lawsuit in county Superior Court against Meta Platforms, Inc. accusing Meta of intentionally facilitating and profiting from billions of scam advertisements on Facebook and Instagram, defrauding seniors and families and squeezing small businesses out of fair access to consumers.

The civil prosecution action brought by the county counsel’s office is considered to be the first brought in California and the first initiated by a local civil prosecutor in the U.S.

The complaint alleges that Meta tracks up to 15 billion scam ads shown to users every day across its platforms, generating $7 billion in revenue. The county said in its complaint that Meta’s own systems flag ads that are likely scams but, instead of stopping them, charges scammers a premium price.

“Meta knows scam ads are rampant on its platforms but chooses profits over proven scam-prevention measures,” the county said in its complaint.

The lawsuit further alleges that Meta’s sophisticated artificial intelligence tools and high-tech programs actively target vulnerable consumers and contribute to creating and refining scam ads.

“Meta’s platforms have become a preferred hunting ground for scammers, and our lawsuit alleges that Meta not only knows it, but has put in place systems and tools to ensure it profits from it,” said Assistant County Counsel Tony LoPresti in a statement to BusinessWire. “No corporation is above the law. As civil prosecutors in Silicon Valley, we cannot allow a tech company as powerful as Meta to continue perpetrating a worldwide scheme to deceive consumers.”

The complaint alleges that Meta has maintained a network of thousands of “Business Partners” that help scammers post their ads. Many of these Business Partners openly advertise their ability to post scam ads on Meta’s platforms.

The scams themselves run the gamut, including fraudulent financial products, cryptocurrency schemes, purported cures for incurable diseases, ineffective nutritional supplements, and impersonations of celebrities asking for monetary contributions.

“Behind every one of the billions of scam ads Meta runs each day, there are real people at risk. Too often, it’s the most vulnerable people who suffer the harshest impacts," LoPresti told BusinessWire. “This lawsuit says what should be obvious: no amount of profit justifies treating our most vulnerable residents as acceptable collateral damage.”

Meta’s own internal documents estimate its platforms host a third of all U.S. internet scams and contributed to more than $2.5 billion in losses for Californians in 2024 alone, according to the lawsuit complaint.

The county alleges that Meta’s practices flood its ad auctions with fraudulent ads that drive up costs for legitimate small businesses, while its AI tools generate and test thousands of ad variations in ways that a Reuters investigation found can make ads significantly more misleading.

According to the lawsuit, Meta’s algorithms then steer these deceptive ads toward people most vulnerable to harm, including users who previously clicked on scam ads, compounding losses among those least able to bear them. Meanwhile, the company publicly touts its commitment to safety but internally prioritizes revenue, including imposing “revenue guardrails” that limit enforcement against scam ads.

The county is asking the court for a permanent injunction to stop Meta’s unlawful practices, for an order requiring restitution for money lost as a result of Meta’s actions and civil penalties, including enhanced penalties for violations affecting senior citizens.

Meta reported nearly $201 billion in revenue in 2025, about 98% of its revenue came from advertising, according to a BusinessWire report.

“It is no accident that Meta platforms, including Facebook and Instagram, are involved in one third of Internet scams in the U.S.,” the county said in its lawsuit. “Every day, consumers across the world are exposed to 15 billion scam ads on Meta platforms. These ads deceive consumers, posing serious financial risks; increase costs for legitimate advertisers; and cause a wide range of harm to people and businesses worldwide.”

The lawsuit alleges that Meta has abandoned anti-scam efforts, and “has declined to implement universal advertiser verification—a proven, cost-effective identity-check process that Google has successfully been using since 2020.”

The lawsuit also accused Meta of actively contributing to “the creation, optimization, and targeting of scam ads.”

The county said Meta is breaking its promises “to prioritize safety, security, and scam prevention.”

The county has enlisted three national law firms – Bernstein Litowitz Berger & Grossmann of New York City, Bishop Partnoy of Washington D.C. and Renne Public Law Groeup of San Francisco – as outside special counsel for the lawsuit.

“The factual record of misconduct in this case is extraordinary,” BLB & G Partner Avi Josefson told BusinessWire. “Meta doesn’t just fail to stop scam ads—it actively participates in creating them through its AI tools, profits from them through its ad auction system, and steers them toward the consumers most likely to be deceived. The evidence shows a company that had every tool at its disposal to protect the public and chose, again and again, to protect its bottom line instead.”

The case is People of the State of California v. Meta and the full complaint is available here.

Santa Clara County Initial Complaint Against Meta Scam Advertisements

Three decades of journalism experience, as a writer and editor with Gannett, Knight-Ridder and Lee newspapers, as a business journal editor and publisher and as a weekly newspaper editor in Scotts Valley and Gilroy; with the Weeklys group since 2017. Recipient of several first-place writing and editing awards, California News Publishers Association.