Meta Threatened With CFPB Lawsuit Over Financial Product Ads

Facebook parent Meta Platforms Inc. is confronting a potential lawsuit from the Consumer Financial Protection Bureau over advertising and disclosure practices, the company said.

CFPB staff informed Meta on Sept. 18 that it is weighing potential legal action related to advertising for financial products on the company’s platforms, which include photo-sharing platform Instagram and messaging service WhatsApp, the company revealed in a Thursday securities filing.

The CFPB is also looking into disclosures and controls regarding third-party advertising for financial products, Meta said in its quarterly report for the third quarter of 2024.

“We disagree with the claims staff is considering and believe an enforcement action is unwarranted,” Meta said in its securities filing.

The company said it has officially responded through the CFPB’s “notice and opportunity to respond and advise” process.

The CFPB could choose to file a lawsuit “in the near-term” seeking financial penalties and other relief, Meta said.

CFPB Director Rohit Chopra has long had his eyes on Facebook and its parent company, dating to his time as a federal trade commissioner.

The CFPB has also increased its focus on Big Tech, including Meta, under Chopra’s leadership.

The agency is developing a “larger participant” rule that would bring the most prominent operators of digital wallets and other digital payments companies, such as Meta, Google parent company Alphabet Inc., and Apple Inc., under direct CFPB supervision.

The CFPB expects to finalize the rule in the coming months.

The CFPB last month ordered Apple and Goldman Sachs Group Inc. to pay $89 million for misleading customers and mishandling complaints related to Apple Card, a joint venture between the two companies.