Facebook and Instagram owner Meta is to face a multi-billion pound group legal action after being accused of enabling scam advertisements that have devastated the financial lives of tens of thousands of Britons. Every year, tens of thousands of people are scammed out of their savings after responding to fraudulent online advertisements promoting fake investment schemes, cryptocurrency fraud and bogus financial products.

Yet social media platforms are estimated to have made more than £430million from UK users alone last year through hosting such fake adverts. Victims are targeted by algorithms which track online activity. As a result, someone searching for pension advice or looking to invest may be shown relevant adverts – some of which may be fake.

The legal claim is being launched by two law firms, Humphries Kerstetter and Richardson Hartley Law, to recoup the billions of pounds that are lost each year in online scams through Facebook and Instagram. Martin Richardson, Senior Partner at fraud specialists Richardson Hartley Law, said: “Politicians are wary of taking on trillion-dollar corporations with armies of lawyers and lobbyists, and that reluctance has left victims without justice for too long. The people we represent are good, honest, intelligent individuals. They have lost their savings, their confidence, sometimes everything.”

The human cost of such scams can be devastating. An initial sign-up process run by Richardson Hartley Law found that the average loss per victim stands at around £37,000 – often representing life savings accumulated over decades. Despite the scale of the harm, neither the government nor regulators have moved decisively to hold Meta to account.

Earlier this month money guru Martin Lewis and consumer champions Which? wrote to the Keir Starmer demanding urgent action against the plague of online fraud. “Major online platforms are not just hosting criminal activity, they are actively profiting from it,” the letter stated.

The case follows a series of explosive Reuters investigations using Meta’s own internal documents, which claimed that the company had knowingly profited from fraudulent advertising. The report alleged that, if Meta suspected an advert was fraudulent then it would charge the scammers more money and only took down the offending advert it was 95% certain it was a fraud.

Among victims is digger driver Wayne Luxon, 43, from Taunton, Somerset, who lost £140,000 to a cryptocurrency scam after seeing a ‘deepfake’ Martin Lewis video on Facebook. He said he went to a “dark place” after he was conned into investing into a fraudulent clone of a legitimate platform.

He added: “Facebook should be stopping these adverts straight away. It’s not fair to the people that get conned into investing, and once you click on one advert there’s another and another. They are constantly coming up on your feed.”

The group action is being pursued on a no-win, no-fee basis. Anyone who lost £2,000 or more after responding to a fraudulent advertisement on Facebook or Instagram in the past six years may be eligible to join.

Meta insisted last night that it “aggressively” fights scams “on and off our platforms because they’re not good for us or the people and businesses that rely on our services”.

“Scammers are determined criminals who use increasingly sophisticated tactics to defraud people and evade detection on our platforms and across the internet,” said a Meta spokesperson.

“We require advertisers promoting financial products in the UK to demonstrate appropriate FCA authorisation and we removed over 159 million scam ads last year alone – 92% of which we took down before anyone reported them.

“Our ongoing collaboration with the banking sector and law enforcement has helped intercept fraudulent activity, protect people from scams, and hold scammers accountable, reflecting our commitment to addressing this widespread challenge.”