Three US users of Meta platforms who say they have fallen victim to scams have sued Meta over adverts on Facebook and Instagram that promoted fraudulent crypto projects.
The three plaintiffs, from Florida, Georgia and Illinois, allege in a class action that Meta actively helped to create, place and target the fraudulent adverts. The complaint was filed late last week in a federal court in San Francisco.
According to the plaintiffs, they ended up in WhatsApp groups via adverts on Facebook or Instagram, where they then came into contact with scammers. These scammers allegedly persuaded them to transfer money or cryptocurrency to certain digital wallets.
When the victims later tried to withdraw their money, they were refused permission to do so. According to the complaint, this showed that the balances displayed were merely fictitious and that the money they had deposited had in the meantime disappeared.
The plaintiffs are also taking aim at Meta’s generative AI tools. According to them, these tools have increased the effectiveness of fraudulent adverts, among other things because they can be used to create hundreds of variants of adverts that are optimised to reach vulnerable users.
In addition, the plaintiffs state that Meta knew, or should have known, that its AI tools contribute to the creation and optimisation of misleading adverts. The company’s algorithms are also said to actively distribute such adverts among vulnerable consumers.
The complaint further accuses Meta of wrongly giving consumers the impression that fraudulent adverts are removed from its platforms.
Meta has previously been sued over similar adverts. Last year, a group of users took the company to court after they allegedly lost money through Facebook adverts that led them to WhatsApp groups. There, they were subsequently drawn into a so-called pump-and-dump scheme.
In that case too, the plaintiffs argued that the scammers used Meta’s AI tools to create the adverts.
Meta relied in that case on Section 230 of the US Communications Decency Act. That law generally protects internet companies from liability for illegal activities by advertisers and other third parties.
However, a court rejected Meta’s request to have the case quickly dismissed. According to the judge, if the allegations were true, Meta would have played too great a role in creating the adverts to be able to invoke that legal protection.
The case was later dismissed after all. The judge ruled that the claims in the lawsuit were pre-empted by federal securities legislation.
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