Why has Rhode Island sued Meta over scam ads on Facebook, Instagram and WhatsApp? Explained

Rhode Island has sued Meta Platforms over allegations that the company allowed widespread scam advertisements on Facebook, Instagram and WhatsApp while profiting from them, despite assuring users that it was working to protect them.

The lawsuit was filed by Rhode Island Attorney General Peter Neronha in Providence Superior Court on Thursday. It accuses Meta of unlawfully benefiting from and participating in the creation of billions of dollars in scam advertising across its platforms.

The case marks the first scam-related lawsuit against Meta by a US state. It follows a similar legal action filed in May by Santa Clara County in California.

Quick answers to key questions

•5 QUESTIONS

1

Why did Rhode Island sue Meta over scam ads?⌵

Rhode Island alleges that Meta allowed scam advertisements on Facebook, Instagram and WhatsApp while profiting from them, despite telling users it was working to protect them. The state says the ads exposed consumers, including vulnerable users, to fraud.

2

What does Rhode Island want the court to order Meta to do?⌵

The lawsuit seeks civil penalties for alleged violations of state law, restitution for affected consumers and recovery of profits Meta allegedly obtained unlawfully. It also asks the court to require Meta to address scam ads rather than profit from them.

3

How has Meta responded to Rhode Island's scam-ad lawsuit?⌵

Meta called the lawsuit “unfounded” and said it would fight the allegations. The company says it works with law enforcement, removed more than 159 million scam ads over the past year and introduced anti-fraud tools.

4

How widespread are the scam ads cited in Rhode Island's lawsuit?⌵

The complaint cites internal documents that estimated Meta displayed around 15 billion higher-risk scam ads to users each day. Those documents also estimated that fraudulent e-commerce, dubious health products and other banned marketing generated roughly 10% of Meta's 2024 revenue.

5

What anti-scam tools does Meta say it has introduced?⌵

Meta says it added alerts about suspicious friend requests on Facebook, expanded advertiser verification and introduced WhatsApp warnings about potentially risky device-linking requests.

The complaint seeks civil monetary penalties for each alleged violation of Rhode Island law, restitution for affected consumers and the recovery of profits that Meta allegedly obtained unlawfully.

It also asks the court to order Meta to take steps to address scam advertisements rather than profit from the ads it allegedly develops and distributes through its platforms.

In a press release, Neronha alleged that Meta knowingly exposed vulnerable users to fraud while making substantial profits.

"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.

Meta has rejected the allegations and said it will fight the lawsuit, describing the case as "unfounded".

Company spokesperson Andy Stone accused the attorney general of refusing to engage with Meta on its efforts to protect Rhode Island residents from scams. He also alleged that the attorney general had hired an out-of-state private law firm to prepare a lawsuit that overlooked the company's existing anti-fraud measures.

Stone said Meta regularly works with law enforcement agencies to disrupt scam networks.

He added that the company had removed more than 159 million scam advertisements and introduced new anti-fraud tools over the past year.

These measures include alerts about suspicious friend requests on Facebook, expanded advertiser verification and warnings about potentially risky device-linking requests on WhatsApp.

The suit was filed a day after a judge in New Mexico ordered Meta to pay that state $25 billion in a case in which a jury found the ​company had misled consumers about the privacy of their data. Meta also agreed in August to pay up to $18 billion in a settlement with nearly all US states to resolve claims it designed its platforms to addict children.

Rhode Island's complaint cites Reuters reporting from last year on internal Meta documents outlining the vast scale of fraudulent advertising on the company's platforms – and Meta's calculations that it was earning far more from high-risk scam ads than it expected to pay in fines for allowing them.

According to those documents, Meta displays around 15 billion "higher risk" scam ads to users every day, and earned roughly 10% of its 2024 revenue from fraudulent e-commerce, dubious health products and other banned marketing.

In many cases, Rhode Island's suit alleged, Meta's AI ad creation tools actively assisted scammers with their fraudulent marketing. Rather than consistently blocking advertisers that its automated detection systems suspected of fraud, Rhode Island alleged, Meta sometimes charged them extra as a penalty.

"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 suit stated.

The company has disputed the Reuters reporting.

"We aggressively fight fraud and scams because people on our platforms don't want this content, legitimate advertisers don't want it and we don't want it either," Stone said in response to the reporting last year, calling it "a selective view that distorts Meta's approach to fraud and scams."

In the months since Reuters published the stories, Meta has claimed progress on anti-scam initiatives. At a White House event on cybercrime prevention on Wednesday, US Attorney General Todd Blanche called the company an "incredible partner to law enforcement."

But Rhode Island alleged that scams remain rampant and readily findable in the company's ad library, a database of ads run on Meta's platforms.

"The ad below, for example, promised to reverse Alzheimer's in 45 days," Rhode Island's complaint stated of one set of scam ads. “There were more than 2,000 versions of this ad active in the Meta Ad library.”

Often the fraudulent ads targeted elderly people, Rhode Island alleged, citing an investigation by the nonprofit Center for Countering Digital Hate, which identified nearly 94,000 scam ads on Meta's platforms.

"Some of these advertisers spent more on Meta ads over a several year period than large brands like Walmart or Pfizer," the lawsuit stated.

Beyond scams, the Rhode Island attorney general's office said it found that Meta was similarly failing to police other types of illicit ads, such as for AI apps for deepfake pornography. In one example provided by the state, an ad featured side-by-side images of a fully clothed woman in a coffee shop next to an image of her engaged in a sex act.

Rhode Island also cited examples of scam ads impersonating public figures and trusted institutions like banks to leverage their credibility, including a case in which scammers in China used the name and image of a senior Bank of America executive in ads on Facebook and Instagram that lured users into scam stock trades on WhatsApp.

Public survey data cited by Rhode Island – and Meta's own internal appraisals obtained by Reuters – indicate that the company's platforms are responsible for a disproportionate share of online scams and that Meta's scam defenses were weaker than those of its main digital advertising competitors.

"It is easier to advertise scams on Meta platforms than Google," concluded an internal Meta review in April 2025.

Meta nonetheless sought to defeat regulatory efforts to require verification, Rhode Island said.

The lawsuit stated that “a banned advertiser can reappear in the time it takes to provide a new email address or phone number.”

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