Rhode Island Attorney General Peter F. Neronha filed a lawsuit against Meta on Tuesday, making the state the first in the nation to take legal action against the social media giant over its handling of fraudulent advertisements — allegations that cut to the heart of whether the company has deliberately tolerated scams because they are profitable.
The suit contends that Meta has failed to take adequate measures to prevent fraudulent ads from circulating across its platforms and, more pointedly, that the company has refrained from stronger enforcement because those ads generate revenue. The complaint does not frame this as mere negligence. It frames it as a knowing choice.
“As alleged, Meta knowingly exposed vulnerable users to fraud and scams, and made enormous profits in doing so,” Neronha said in a statement. “When companies, big or small, take advantage of Rhode Island consumers, this Office will do everything within our authority to hold them to account.”
A pattern of litigation Meta has not yet resolved
Rhode Island’s action follows, and now joins, a widening body of litigation on the same subject. The Consumer Federation of America filed a lawsuit in April, and Santa Clara County in California did the same in May. Rhode Island distinguishes itself as the first state government to bring such a case, a distinction the Attorney General’s office has made explicit.
The legal and financial stakes are considerable. A 2025 investigation by Reuters — which also first reported the Rhode Island lawsuit — found that scam advertisements running across Meta’s networks may be generating billions of dollars for the company, potentially accounting for as much as ten percent of its total revenue. If that figure withstands scrutiny, it would substantially reinforce the core claim that Meta’s financial interest in tolerating fraudulent advertising is structural, not incidental.
Meta, for its part, disputes the characterisation entirely. Spokesperson Andy Stone told Reuters that the company has removed more than 159 million scam ads from its platforms, and he directed pointed criticism at the manner in which the lawsuit was brought. “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,” Stone said. The company has also pursued civil litigation against some creators of fraudulent ads and introduced additional user protections for suspicious messages earlier this year.
Whether those measures constitute a genuine good-faith effort or a calibrated minimum sufficient to deflect legal exposure is precisely what the courts will now be asked to determine.