Rhode Island sues Meta over alleged scam ad practices

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RI sues Meta over scam ads

Highlights

Rhode Island sued Meta, alleging it profits from scam advertising and derives about 10% of its 2024 revenue from fraudulent e-commerce and prohibited health product ads.
The complaint cites Meta's internal documents reporting 15 billion higher-risk scam ads displayed daily, with some scam advertisers allegedly outspending brands like Walmart or Pfizer.
Rhode Island claims Meta's defenses are weaker than rivals, referencing an April 2025 review stating it is easier to advertise scams on Meta platforms than Google.

State complaint targets Meta ad systems

As first reported by Reuters, the lawsuit filed by Rhode Island Attorney General Peter Neronha in Providence Superior Court accuses Meta of profiting from scam advertising while publicly claiming it is working to protect users.

The complaint alleges Meta participates in the creation and delivery of fraudulent ads and earns substantial revenue from prohibited marketing, including dubious health products and fraudulent e-commerce offers. Rhode Island says the company should face monetary civil penalties for each alleged violation of state law, return money to consumers, surrender ill-gotten gains and comply with a judicial order to address scam ads instead of benefiting from them.

In a press release, Neronha says Meta knowingly exposes vulnerable users to fraud and scams while making enormous profits. The lawsuit also argues that Meta's AI ad creation tools help scammers refine deceptive campaigns and that suspected fraudsters are not always blocked, with some instead allegedly paying extra charges as a penalty.

Rhode Island's complaint cites Reuters reporting from last year on internal Meta documents that outlined the scale of fraudulent advertising on the company's platforms. According to those documents cited in the suit, Meta displays about 15 billion higher-risk scam ads daily and derived roughly 10% of its 2024 revenue from fraudulent e-commerce, questionable health products and other banned marketing.

Allegations add to scrutiny of platform safeguards

Rhode Island says scams remain widespread and easy to find in Meta's ad library despite the company's claims in recent months that it is making progress on anti-scam measures. One example cited in the complaint involves more than 2,000 versions of an ad claiming to reverse Alzheimer's in 45 days.

The lawsuit says elderly people are often targeted and cites research by the nonprofit Center for Countering Digital Hate that identified nearly 94,000 scam ads on Meta's platforms. It also alleges some scam advertisers spend more on Meta ads over several years than major brands such as Walmart or Pfizer.

Beyond scam promotions, the attorney general's office says Meta is also failing to police other illicit advertising categories, including AI apps used for deepfake pornography. Rhode Island further points to ads impersonating public figures and trusted institutions, including banks, and describes a case in which scammers in China allegedly used the name and image of a senior Bank of America executive to lure users into fraudulent stock trades on WhatsApp.

Meta disputes Reuters' earlier reporting and says it is aggressively fighting fraud and scams because users, legitimate advertisers and the company itself do not want that content on its platforms. The complaint nonetheless says Meta's own internal reviews and public survey data indicate its platforms account for a disproportionate share of online scams and that its defenses are weaker than those of key digital advertising rivals, with one internal review in April 2025 concluding it is easier to advertise scams on Meta platforms than Google.

Our earlier report on TikTok’s EU gatekeeper challenge under the Digital Markets Act covered a key legal opinion from the Court of Justice adviser backing regulators and urging judges to dismiss ByteDance’s action. The piece explained that if TikTok’s gatekeeper designation stands, it would face strict new obligations in the EU—an outcome with broader implications for how large platforms are regulated and held to compliance standards.

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