Rhode Island Sues Meta, Alleging It Profited From Scam Ads on Facebook and Instagram

Rhode Island Attorney General Peter Neronha filed an 85-page complaint against Meta on Oct. 22 in Providence County Superior Court. It accuses the owner of Facebook, Instagram and WhatsApp of violating the state's Deceptive Trade Practices Act. Rhode Island is the first state to sue Meta over scam ads.

The core allegation: Meta knowingly profited from fraudulent advertising while assuring users it was working to protect them.

"As alleged, Meta knowingly exposed vulnerable users to fraud and scams, and made enormous profits in doing so," Neronha said in a statement.

These are allegations. No court has ruled on any of them.

What the complaint says

The state argues that the ad system that helps legitimate businesses find customers also works for scammers. According to the complaint, Meta's AI advertising tools sometimes helped scammers build their ads. It also alleges Meta charged some suspected fraudsters higher ad prices instead of blocking them, and that the company opposed rules requiring advertisers to verify who they are.

"A banned advertiser can reappear in the time it takes to provide a new email address or phone number," the complaint says.

The examples are specific. One ad promised to reverse Alzheimer's disease in 45 days and ran in more than 2,000 versions in Meta's Ad Library. Others impersonated a senior Bank of America executive to steer users into stock-trading scams on WhatsApp. Another promoted a "Ninjabot AI" trading tool with a $397 license fee. The suit also cites fake investment offers, phony Social Security benefits and dubious health products.

The internal numbers

The complaint draws on internal Meta documents that Reuters reported on in 2025. Those records estimated Meta showed users about 15 billion "higher risk" scam ads a day. They also projected that roughly 10% of the company's 2024 revenue, about $16 billion, would come from ads for scams and banned goods.

Meta disputed that reporting at the time. Spokesperson Andy Stone called it a selective view that distorts the company's approach and said Meta aggressively fights fraud "because people on our platforms don't want this content."

Meta's response

Meta calls the lawsuit "unfounded." A spokesperson said the company regularly partners with law enforcement to disrupt scam networks.

The company also took a shot at how the case was built. "The Attorney General refused to engage with us on ways we protect Rhode Islanders from scams, and has instead hired an out-of-state private law firm to concoct a lawsuit that ignores the full range of actions we take to combat scams every day," the spokesperson said. "We fight scams because they're not good for us or the people and businesses that rely on our services."

Stone said Meta has removed more than 159 million scam ads from its platforms. Meta has also sued some of the people behind fake ads and added protections for suspicious messages earlier this year. The state counters that scam ads remain widespread and easy to find in Meta's own ad library.

What Rhode Island wants

The state is asking for civil penalties for each violation, money back for consumers and the return of Meta's profits from the ads in question. It also wants an order requiring Meta to deal with scam ads it creates or delivers, plus a court-appointed monitor.

The Deceptive Trade Practices Act lets the attorney general sue in Superior Court and seek orders to stop conduct, restore money or property obtained unlawfully, and impose other penalties.

A crowded docket

Rhode Island is not the first government to go after Meta over scam ads. The US Virgin Islands sued in December 2025. Santa Clara County, California, filed a similar suit in May under state false-advertising and unfair-business-practices laws. The Consumer Federation of America filed a proposed class action in Washington, DC, in April.

Meta is fighting on other fronts too. In August, it agreed to pay up to $17.1 billion to 47 states, including Rhode Island, plus the District of Columbia and several territories, to settle claims that its platforms are addictive and endanger children. A day before the Rhode Island filing, a New Mexico judge ordered Meta to pay that state $25 billion after finding it liable for violating consumer protection laws.

Meta's finances took a separate hit the same day Rhode Island sued. The company raised the floor of its 2026 capital spending forecast to $135 billion, its shares fell about 8%, and the cost of insuring its five-year debt against default hit a record 114.79, according to Markit data. Nothing in the filings ties the stock drop or the credit move to the lawsuit.

What comes next

Meta has not publicly detailed its legal response beyond its statements. The first question is whether the case stays in Providence County Superior Court. The bigger one is whether a judge will entertain the state's request for a monitor over Meta's ad systems, which would reach well beyond a fine.