Rhode Island has become the first US state to sue Meta over scam advertising, filing a complaint in Providence County Superior Court on October 22 that accuses the company of knowingly exposing users to fraud while telling the public it was protecting them.
Attorney General Peter Neronha brought the case under the state's consumer protection law. "As alleged, Meta knowingly exposed vulnerable users to fraud and scams, and made enormous profits in doing so," he said in a statement announcing the suit.
The complaint leans heavily on earlier reporting by Reuters, which cited internal Meta documents showing the company estimated it served roughly 15 billion high-risk scam ads to users every day. Those same documents projected that about 10% of Meta's 2024 revenue, close to $16 billion, would come from ads tied to scams and banned goods.
Rhode Island's filing goes further than simply citing that reporting. It alleges Meta's own AI-powered advertising tools sometimes made scam ads more effective, and that the company charged some suspected fraudsters higher prices for ad placement rather than blocking them outright. The state also claims Meta pushed back against proposed rules that would have forced advertisers to verify their identity, which would have made it harder for banned accounts to come back under new names. "A banned advertiser can reappear in the time it takes to provide a new email address or phone number," the complaint states.
Specific ads named in the suit
The complaint points to concrete examples pulled from Meta's own Ad Library. One ad claimed it could reverse Alzheimer's disease within 45 days and reportedly ran in more than 2,000 variations. Others impersonated a senior Bank of America executive to pull users into stock-trading scams conducted over WhatsApp.
Rhode Island is asking the court for civil penalties on each violation, restitution for affected consumers and the surrender of Meta's profits tied to the ads in question. The state also wants a court order forcing Meta to act on scam ads it creates or delivers, plus the appointment of an outside monitor to oversee compliance.
Meta has previously disputed the underlying Reuters reporting that the lawsuit relies on, calling it a selective account that distorts how the company handles fraud. "We aggressively fight fraud and scams because people on our platforms don't want this content," spokesperson Andy Stone said at the time the Reuters story ran. Meta has since pointed to what it describes as progress in its anti-scam efforts, though Rhode Island's complaint argues scam ads are still common and easy to find in the company's own ad archive.
The case is not Meta's first brush with scam-ad litigation this year. Santa Clara County in California filed a similar lawsuit in May, and the Consumer Federation of America sued Meta in Washington, DC, in April over the same issue. None of the allegations have been tested in court, and Meta has not yet filed a formal response to Rhode Island's complaint.
TBFiled by The Tech Business Desk
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