Rhode Island Sues Meta Over Fraudulent and Deceptive Ads

Rhode Island Files Fraud Lawsuit Against Meta Over Deceptive Ads

Rhode Island Attorney General Peter Neronha filed a lawsuit against Meta Platforms on Thursday, October 22, 2026, alleging that the tech giant knowingly helped create and optimize advertisements for scams and restricted products. Filed in Providence County Superior Court, the action marks the first time a U.S. state has sued Meta over this alleged behavior, following a similar complaint brought by Santa Clara County in California.

The state’s complaint targets Meta’s revenue streams and platform moderation practices. According to the court filing, Meta violated Rhode Island’s Deceptive Trade Practices Act by publicly claiming it aggressively combats fraud while simultaneously distributing large volumes of fraudulent advertisements to unsuspecting users. Neronha stated that the company exposed vulnerable users, particularly senior citizens, to financial scams while profiting significantly from the activity.

Targeting Vulnerable Users Through Meta’s Delivery Systems

The lawsuit details how Meta’s own algorithmic tools allegedly assisted advertisers in reaching at-risk consumers. Rather than blocking illicit content, the company provided design assistance, audience-selection tools, targeting capabilities, and optimization systems that enabled advertisers to identify and repeatedly solicit individuals likely to respond to fraudulent schemes.

The state alleges that these systems promoted fraudulent investment opportunities, false Medicare and Social Security benefit offers, deceptive health supplements, and restricted products such as tobacco and drugs. The complaint asserts that Meta showed users an estimated 15 billion ads containing clear signs of fraud every day, with ads presenting higher legal risk yielding $7 billion annually in revenue.

Cites Revenue from Scams and Fake Accounts

The legal action cites figures indicating that unlawful advertising forms a substantial portion of the company’s earnings. In 2025, Reuters reported that about 10% of Meta’s annual ad revenue, amounting to $16 billion, came from ads for scams or restricted goods. The lawsuit claims Meta knew this revenue share was tied to illicit activity yet chose to protect its earnings rather than address the underlying fraud.

In addition, the complaint alleges that Meta knowingly tolerated millions of fake accounts to project an image of constant growth. These fake accounts reportedly helped legitimize and distribute fraudulent ads by interacting with scam networks, making the deceptive offers appear mainstream and boosting their distribution through Meta’s recommendation algorithms.

Meta’s Response and Ongoing Industry Scrutiny

Meta dismissed the legal action as unfounded and defended its platform integrity. A company spokesperson stated that the Attorney General refused to engage with them on practical ways to protect residents from scams. The spokesperson added that Meta has partnered with law enforcement globally, removed over 159 million scam ads in the past year, and launched new protective tools.

The Rhode Island case joins mounting legal pressure against Meta regarding online fraud. The company is currently facing similar litigation from the Consumer Federation of America, Santa Clara County, and individual consumers. Concurrently, the Federal Trade Commission has launched a proceeding that could introduce regulations requiring online platforms to curb fraudulent ads run by scammers impersonating businesses and government agencies.

Relief Sought by Rhode Island Prosecutors

The lawsuit asks the Providence County Superior Court for several forms of legal remedy under the Deceptive Trade Practices Act. State prosecutors are seeking a declaratory judgment that Meta violated state law, alongside permanent injunctive relief to halt the alleged practices.

The complaint also requests civil penalties for each violation, restitution for affected Rhode Island consumers, and the disgorgement of unjust enrichment and ill-gotten gains with interest. The state is asking the court to appoint a receiver, auditor, or monitor to ensure Meta complies with any future judicial relief.

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