Fraud cases in California County are adding to the legal challenges of Meta | Social Media Stories

A district in the state of California in the US has become the latest attack against Meta Platforms, a large multinational organization that operates Facebook, Instagram, WhatsApp, Messenger and Threads.

The lawsuit filed earlier this week by Santa Clara County alleges that Meta willfully profited from fraudulent sales, which it claims generates $7bn a year.

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It is the latest US lawsuit against the social media company’s practices, following a a common decision in March that found the company had intentionally harmed young users with design tools.

Meta, which is expected to generate more than $200bn in revenue by 2025, also faced another lawsuit filed by the Consumer Federation of America, which said its piracy strategy violated consumer protection laws.

What does this case say?

The lawsuit alleges that Meta both “aided and abetted” the fraud in the way it ran its ads, according to Santa Clara County.

Far from preventing fraudulent transactions, potential offenders are only identified by the Meta system. Meta blocked only 95 percent of advertisers who were fraudulent, according to Meta’s internal documents. Suspected fraudsters who fall below that limit are charged a fine to continue advertising, according to the 2025 search and Reuters news agency.

The lawsuit alleges that Meta’s artificial intelligence tools and software tools target “vulnerable consumers”.

The scam includes “fraudulent financial transactions, cryptocurrencies, purported cures for chronic diseases, ineffective diets, and impersonation of celebrities asking for money”.

“Behind the billions of fraudulent transactions that Meta processes every day, there are real people who are at risk.” Oftentimes, it’s the most vulnerable people who suffer the most,” Santa Clara County Supervisor Tony LoPresti said in a statement.

The region added that California residents reported more than $2.5bn in lost income in 2024, with seniors particularly affected.

In a statement to Reuters earlier this week, Meta spokesman Andy Stone said the case “undermines our goals and undermines everything we do to fight fraud every day”.

“We take a serious stand against fraud on our platforms because it’s not good for us or the people and businesses that rely on our services,” Stone said.

The company said it removed 159 million fraudulent ads last year and cooperated with law enforcement agencies.

Why is Santa Clara starting this case?

Santa Clara County is one of the richest in the world. It is a major part of Silicon Valley, a global technology center and home to several large companies.

The lawsuit is filed on behalf of all California residents, and the complaint alleges that “Meta’s principal place of business is in California” and that the company’s principals “do business in California and, in particular, in Santa Clara County”.

“As prosecutors in Silicon Valley,” LoPresti said in a statement, “we cannot allow a powerful technology company like Meta to continue to perpetrate a global conspiracy to defraud consumers.”

Meta and the companies it owns have faced numerous lawsuits since it was founded in 2004, which was then called TheFacebook, Inc. Many have to do with his conservative behavior, secrecy, and harming children.

But a recent ruling in California against the company has been seen as a radical change in how it is used.

A court in California in March found that the company, along with YouTube, posted material that was addictive and harmed the mental health of the arrested youth, identified as 20-year-old KGM.

Although the company was ordered to pay only $4.2m, the decision was seen as a boon for the future and the current challenges. Apparently, the judges agreed with the fact that social media can harm a person and be held accountable.

Separately that month, a New Mexico court ruled that Meta violated state law by failing to protect children from predators.

Last week, the Consumer Federation of America, a non-profit organization, filed a lawsuit in Washington, DC, alleging that Meta did not live up to its promises to protect against scammers, prioritizing profits over users. Meta also denied the allegations.