Meta Prevails In Battle Over Scam Real Estate Ads

In a decision issued late last week, U.S. District Court Judge George Russell, III in Baltimore said Meta was protected by Section 230 of the Communications Decency Act, which generally provides that interactive companies aren't responsible for illegal content posted by third parties.

The ruling comes in a class-action complaint brought last year by Barry Glazer and Gina Gargeu, who own the real estate company Century 21 Downtown. Glazer is also a prominent personal injury attorney, and prolific TV advertiser.

The duo alleged that scammers were illegally occupying houses they didn't own, and then advertising them on platforms including Facebook Marketplace and Instagram.

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The fraudsters "break into plaintiff's vacant homes, change locks, and sell access to these homes to third-party individuals, collecting money and falsely claiming legal authority to provide entry," the complaint alleged.

The plaintiffs added that "reasonable safeguards" such as "verification of property ownership through public land records" and "confirmation of listing authority by licensed real estate professionals" were "technically feasible."

Meta urged Russell to throw out the lawsuit at an early stage for several reasons. Among other arguments, Meta said that even if the allegations in the complaint were proven true, the company wouldn't be liable for ads placed by outside individuals.

"This is precisely the type of claim Congress barred under Section 230 of the Communications Decency Act," Meta argued in written papers.

The company added that Glazer and Gargeu seek "to hold Meta liable for disseminating third-party content."

Russell sided with Meta and threw out the case, writing that Meta's motion was "meritorious and well-founded."

The ruling marks the second time Russell rejected Glazer's attempt to sue Meta over fraudulent ads; last October, the judge dismissed Glazer's complaint against the platform over ads for counterfeit coins.

Not all courts agree that Section 230 bars claims against Meta over fake ads. In 2024, for instance, a federal appellate court revived a lawsuit brought by Facebook users who said they lost money after responding to phony ads on the platform.

U.S. District Court Judge Jeffrey White in the Northern District of California initially dismissed that matter, ruling that Section 230 barred the claims. But the 9th Circuit Court of Appeals reversed White's order, ruling that the users could move forward with allegations that Meta violated representations in its terms of service by failing to police Facebook ads placed by third parties.

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