Attorney General Neronha sues Meta for fraudulent advertisements
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Rhode Island Attorney General Peter Neronha today
filed a lawsuit
against Meta for allegedly failing to curb advertisements for fraudulent
products and financial scams on its platforms, despite telling the public it
uses sophisticated efforts to prevent such ads. Rhode Island is the first state
to sue Meta over this alleged behavior, following a similar lawsuit by Santa
Clara County in California.
The Complaint, filed in Providence County Superior Court,
alleges that Meta continues these practices because they generate substantial
revenue, despite knowing that scam ads cause significant financial harm to
vulnerable consumers. Meta’s alleged conduct violates Rhode
Island’s Deceptive Trade Practices Act (DTPA), and the Complaint
seeks penalties and injunctive relief under that statute.
“For a company that engages so many Rhode Islanders and
Americans, maintaining high standards for consumer safety should be of the
utmost importance,” said Attorney General Neronha. “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.”
As alleged in the Complaint, Meta has helped create, refine, and distribute advertisements that promoted fraudulent schemes, deceptive offers, impersonation scams, fake investment opportunities, false Medicare and Social Security benefit offers, ineffective or dangerous health supplements or treatments, and other unlawful or deceptive conduct directed at consumers, including consumers in Rhode Island.
Importantly, Meta provided design assistance, audience-selection tools, targeting capabilities, optimization systems, delivery services, analytics, and related services that enabled advertisers to identify, engage, and repeatedly solicit consumers likely to respond to fraud ads. As alleged, Meta knowingly and intentionally used extensive accountholder data to help advertisers target vulnerable consumers who are most likely to engage with scam ads. In particular, at-risk groups like senior citizens have lost substantial sums of money to fraud ads they encounter on Meta platforms.
In 2025, Reuters
reported that about 10% of Meta’s annual ad revenue ($16 billion) comes
from ads for scams or restricted goods, that Meta knew this fact, and that Meta
devised ways of further profiting from such ads while telling the public that
it developed sophisticated methods to detect, remove, and prevent fraud.
Reuters also reported that Meta knows, based on its user data, which consumers
are most vulnerable to fraud or scam ads and uses that knowledge to help
advertisers fine-tune their ads and reach their target audiences.
As further alleged, Meta showed users an estimated 15
billion ads containing clear signs of fraud every day, a fact Meta knew, and
ads that “present higher legal risk” yielded $7 billion annually in revenue.
Additionally, Meta represented to consumers and regulators that it developed
robust tools to identify and remove scam ads. In reality, the Company turned a
blind eye to fraud findings, and in other cases, refused to implement tools to
identify and remove fraudulent ads, allowing scam ads to proliferate. As
further alleged, rather than removing some fraudulent ads, Meta charged
companies a premium to display them, generating even more revenue from
proliferating these scams.
The State is seeking a declaratory judgment that Meta
violated the DTPA; injunctive relief; restitution to affected Rhode Island
consumers; civil penalties for each violation of the DTPA; disgorgement of
Defendants’ unjust enrichment, benefits, and ill-gotten gains, plus interest,
acquired as a result of the alleged unlawful conduct; and the appointment of a
receiver, auditor, or monitor to ensure Meta’s compliance with relief ordered
by the Court.
Today’s lawsuit follows an August 2026 multistate
settlement with Meta Platforms, Inc. of up to $17.1 billion –
one of the largest state consumer protection settlements in history – under
which Rhode Island will receive at least $49.4 million and up to $64.5 million.
As part of that settlement, Meta must implement a sweeping set of safety
features designed to protect children on Instagram and Facebook.
Deceptive Trade Practices Act
In 2021, Attorney General Neronha worked with the General
Assembly to pass legislation restoring the Office of the Attorney General’s
authority to protect Rhode Island consumers from DTPA violations. Other efforts
led by the Attorney General under the DTPA include a lawsuit against a
residential solar
company for allegedly scamming Rhode Islanders, a suit against a contractor
for alleged unlawful behavior, halting
a Certificate of Good Standing scheme, as well as other investigations
involving real estate schemes, auto dealerships, and non-compliance with lead
safety laws within rental units, among other efforts.
