Class Action Claims Meta Allows Investment Scammers to Impersonate Financial Professionals

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A proposed class action lawsuit claims that Meta knowingly allows fraudsters on Facebook, Instagram and WhatsApp to impersonate financial professionals in advertising and group messaging for investment scams disseminated to millions of users nationwide.

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The 37-page lawsuit alleges that criminals running stock investment scams, without repercussion, have been able to exploit Meta’s paid advertising tools on Instagram and Facebook to impersonate actual financial advisors and professionals to create a façade of legitimacy for their scams.

Per the complaint, advertisers can pay Meta to create and run ads using the tech giant’s Ads Manager, which allows them to select an objective for the advertisement(s); set budget and bid strategies; choose audience parameters, such as demographics, behaviors, lookalikes and interests; upload text, images and/or videos; and designate placement across feeds, stories, short-form videos and other formats. When paid ads are disseminated, Meta employs machine-learning systems designed to maximize and optimize the ads’ reach and engagement, the filing says.

According to the suit, Meta represents that all advertisements on its platforms, including those created using its Ads Manager tools, are subject to its Terms, Community Standards and Advertising Policies, which state that false or misleading statements, fraudulent or deceptive practices and impersonation are strictly prohibited, and that Meta will remove or restrict any content, accounts and advertisements found in violation of that policy.

Per the filing, Meta also states that each Instagram and Facebook advertisement made using the Meta Ads Manager is subject to both human and automated review processes before being disseminated across the advertiser’s platform(s) of choice.

However, the class action lawsuit alleges that scammers have been able to use Meta’s Ads Manager to generate and run ad campaigns for investment scams whereby they impersonate financial professionals who possess legitimate online presences on Meta’s platforms, in violation of both the law and Meta’s terms and conditions. These impersonations, per the suit, are used to endorse the scammers’ investment cons, lending them a false sense of legitimacy and steering victims into WhatsApp group chats run by the scammers, where consumers are then told to buy inflated stocks as part of various pump-and-dump schemes.

The complaint alleges that the impersonations have caused and may continue to cause great harm to the plaintiffs’ and other proposed class members’ reputations, which in turn negatively affects their livelihoods as financial professionals, given that the success and growth of their businesses, per the suit, “depend on credibility, candor and client trust.”

Further, the filing claims that the plaintiffs and class members are at continued risk for future instances of identity theft and subsequent harm because, even after they first reported the impersonations to Meta, additional instances of impersonating ads appeared soon after. The lawsuit says that Meta has done functionally nothing to crack down on the impersonation and identity theft problems at issue in this class action, and has allowed the illegal advertisements, from which it profited due to the nature of its paid Ads Manager, to be disseminated on its platforms, even after the ads went through Meta’s review processes.

The Meta class action lawsuit seeks to represent any financial professionals in the U.S. whose names, voices, likenesses, credentials, images, branding or professional personas were, between January 1, 2023 and the present, used without their consent in paid advertisements or related promotional content for securities or other investment opportunities on Meta’s platforms, including Facebook, Instagram, and/or click-to-WhatsApp campaigns and WhatsApp groups.

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