Meta class action lawsuit overview:
- Who: Three consumers filed a class action lawsuit against Meta Platforms Inc. and Instagram LLC.
- Why: The plaintiffs allege Meta profits from cryptocurrency scam ads run on its social media platforms Facebook and Instagram.
- Where: The Meta class action lawsuit was filed in California federal court.
A new class action lawsuit alleges Meta Platforms profits from cryptocurrency scam ads that run on its social media platforms Facebook and Instagram.
Plaintiffs Niroshini Dassanayake, Kenneth Gugel and Andrew Svoboda claim Meta is aware of the scam cryptocurrency ads but does not take meaningful action to prevent them from running on its social media platforms.
“Meta has long been aware of fraudulent or scam ads on its social media platforms, but it has refused to invest meaningfully in technology, personnel and processes to monitor, identify and prevent these scam ads,” the Meta class action lawsuit says.
Dassanayake, Gugel and Svoboda argue Meta, rather than fixing the issue, has invested in developing artificial intelligence tools that have enhanced the effectiveness of fraudulent ads by generating hundreds of variations that are optimized to drive engagement by vulnerable users.
The group wants to represent a nationwide class and additional sub-classes of persons and entities who received advertisements on Facebook or Instagram and, because of these ads, suffered losses after investing in crypto investing scams.
Scam cryptocurrency ads used specialized targeting, class action alleges
The plaintiffs in the Meta class action lawsuit argue they were victimized by cryptocurrency investment scams promoted via ads on Facebook and Instagram that instructed them to make deposits to trade cryptocurrency.
The lawsuit also alleges that Meta’s algorithms actively steer scam ads toward users who are most likely to engage with them, exacerbating the problem.
“The funds that victims deposited were transferred to cryptocurrency wallets controlled by the scammers and their co-conspirators,” the lawsuit says.
The plaintiffs are suing for violations of California consumer laws and for breach of contract. They seek certification of the class action, an injunction, damages, fees, costs and a jury trial.
In other recent news, a federal judge in California dismissed two class action lawsuits filed against Meta over claims it used its AI tools to enable pump-and-dump schemes that caused nearly $30 million in investor losses.
Have you seen cryptocurrency scam ads while using Facebook or Instagram? Let us know in the comments.
The plaintiffs are represented by Stacey M. Kaplan, Joseph H. Meltzer, Melissa L Yeates, Tyler S. Graden, Jordan E. Jacobson and Daniel S. Dicce of Kessler Topaz Meltzer & Check LLP and Tom P. Cartmell, Tyler W. Hudson, J. Kirk Goza and Lauren K. Bretz of Wagstaff & Cartmell LLP.
The Meta class action lawsuit is Dassanayake, et al. v. Meta Platforms Inc., et al., Case No. 26-cv-09521, in the U.S. District Court for the Northern District of California.
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