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Meta sued over failure to crack down on scam ads
Meta has been accused of profiting from scams ads

Meta sued over failure to crack down on scam ads

Oct 23, 2026
12:48 pm

What's the story

Rhode Island Attorney General Peter F. Neronha has sued Meta over its alleged failure to combat scam advertisements on its platforms. The lawsuit claims that the social media giant has not done enough to prevent fraudulent ads and has even failed to take stricter action against them as they generate revenue for the company.

Consumer protection

Meta knowingly exposed users to fraud and scams: Neronha

Neronha said, "For a company that engages so many Rhode Islanders and Americans, maintaining high standards for consumer safety should be of the utmost importance."

He further alleged that Meta knowingly exposed vulnerable users to fraud and scams while making huge profits in the process.

The lawsuit is the first of its kind by a US state against Meta over scam ads.

Company defense

"We've removed over 159 million scam ads from our platforms"

Responding to the lawsuit, Meta spokesperson Andy Stone said that the company has removed over 159 million scam ads from its platforms.

He criticized Neronha for not engaging with them on ways they protect Rhode Islanders from scams and instead hiring an out-of-state private law firm to file a lawsuit that ignores their efforts against scams.

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Legal precedents

Similar lawsuits filed against Meta

Notably, Rhode Island isn't the only state to sue Meta over this issue.

The Consumer Federation of America had filed a similar lawsuit in April, followed by Santa Clara County in California doing the same in May.

A 2025 report by Reuters had revealed that scam ads across its networks could be generating billions of dollars for Meta, possibly up to 10% of its revenue.

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Company initiatives

Meta has taken steps to combat fraudulent ads

Despite the allegations, Meta has taken some steps to combat fraudulent ads.

The company has shut down bad actors behind some of these ads and sued their creators.

It also added user protections for suspicious messages earlier this year.

However, the Rhode Island lawsuit alleges that Meta's AI ad creation tools even assisted scammers with their fraudulent marketing in many cases.

Allegations

AI tools helped scammers create effective marketing, lawsuit alleges

The Rhode Island lawsuit alleges that rather than consistently blocking advertisers suspected of fraud by its automated detection systems, Meta sometimes penalized them with additional charges.

"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.

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