Rhode Island sues Meta over alleged scam ads on Facebook, Instagram and WhatsApp

# Rhode Island Sues Meta Over Alleged Widespread Scam Advertising on Its Platforms

Rhode Island has filed a lawsuit against Meta Platforms, accusing the technology company of allowing widespread scam advertising on Facebook, Instagram and WhatsApp while profiting from fraudulent promotions, according to Reuters.

The lawsuit was filed Thursday by Rhode Island Attorney General Peter Neronha in Providence Superior Court. It alleges that Meta unlawfully benefited from and participated in the creation of billions of dollars’ worth of scam advertisements despite publicly assuring users that it was working to protect them from fraud.

Rhode Island is seeking civil monetary penalties for each alleged violation of state law, restitution for affected consumers, the recovery of allegedly ill-gotten gains and a court order requiring Meta to address scam advertising rather than profit from it.

“As alleged, Meta knowingly exposed vulnerable users to fraud and scams, and made enormous profits in doing so. When companies, big or small, take advantage of Rhode Island consumers, this office will do everything within our authority to hold them to account,” Neronha said in a press release.

The complaint draws on earlier Reuters reporting based on internal Meta documents that reportedly detailed the scale of fraudulent advertising across the company’s platforms. According to those documents, Meta calculated that revenue generated by higher-risk scam advertisements could exceed the fines it expected to incur.

The internal figures cited in the reporting indicate that Meta displays approximately 15 billion “higher risk” scam advertisements to users daily. The documents also reportedly show that around 10% of Meta’s 2024 revenue came from prohibited marketing, including fraudulent e-commerce promotions and questionable health products.

Rhode Island’s lawsuit further alleges that Meta’s artificial intelligence advertising tools helped scammers develop and optimize fraudulent campaigns. The complaint also claims the company sometimes imposed additional fees on advertisers flagged as potentially fraudulent by its automated detection systems rather than consistently blocking them.

“Meta knowingly helped create and optimize these ads to ensure that they were as effective as possible and then lied about them, misrepresenting to the public its commitment to prevent fraud on its platforms,” the complaint stated.

Meta has previously challenged Reuters’ findings. Responding to the earlier reporting, company spokesperson Andy Stone said Meta aggressively combats fraud because such content is unwanted by users, legitimate advertisers and the company itself. He characterized the reporting as “a selective view that distorts Meta’s approach to fraud and scams.”

Although Meta has said it has made progress in tackling scams since the reporting emerged, Rhode Island alleges that fraudulent advertisements remain widespread and readily accessible through Meta’s advertising library, which provides a database of ads running across its platforms.

The complaint cites advertisements promoting questionable health claims as examples of the problem. One group of ads allegedly promised to reverse Alzheimer’s disease within 45 days. Rhode Island said more than 2,000 versions of the advertisement were active in Meta’s advertising library.

The lawsuit adds to scrutiny of how major digital platforms detect and respond to deceptive advertising, particularly promotions involving health products and online commerce. Rhode Island’s allegations focus not only on the presence of scam advertisements but also on whether Meta’s systems and business practices enabled them to reach users and generate revenue.

Meta’s response to the allegations and the legal proceedings will determine how the dispute develops. The claims in the lawsuit remain allegations, and the case seeks to establish whether the company violated Rhode Island law.