Rhode Island has launched a major legal challenge against Meta Platforms, accusing the technology giant of knowingly allowing fraudulent advertisements to spread across its social media platforms while generating substantial revenue from deceptive marketing.
The lawsuit, filed October 22, 2026, by Attorney General Peter Neronha in Providence County Superior Court, makes Rhode Island the first U.S. state to pursue Meta specifically over its alleged financial benefits from scam advertising.
The 85-page complaint alleges that the parent company of Facebook, Instagram and WhatsApp violated Rhode Island’s consumer protection laws by failing to prevent fraudulent advertising and misleading users about its efforts to combat online scams. The lawsuit draws on previous reports about internal Meta documents suggesting that fraudulent and prohibited advertising represented a significant source of revenue.
According to the allegations, approximately $16 billion, or around 10% of Meta’s 2024 revenue, was associated with advertisements promoting scams or restricted products. The complaint also cites estimates that Meta displayed approximately 15 billion advertisements containing indicators of fraud each day.
These figures are based on internal estimates and allegations cited in the lawsuit, not findings independently established by a court. Rhode Island officials argue that the company’s financial incentives discouraged aggressive enforcement against suspicious advertisers.
They further allege that Meta sometimes charged higher advertising rates to businesses suspected of fraudulent activity instead of immediately removing them. The complaint identifies several categories of deceptive advertisements, including fake investment opportunities, misleading Social Security and Medicare benefit offers, fraudulent health products and impersonation schemes.
Older consumers are a particular concern because financial scams can threaten retirement savings and household security. State officials allege that Meta’s sophisticated advertising tools allowed questionable advertisers to identify individuals most likely to respond to fraudulent promotions.
The lawsuit also argues that automated systems helped advertisers refine their messages and improve their targeting. One example involves advertisements claiming that Alzheimer’s disease could be reversed within 45 days.
According to the complaint, more than 2,000 versions of that advertisement appeared in Meta’s advertising library. The state contends that these examples demonstrate weaknesses in the company’s approach to preventing consumer deception.
Meta strongly disputes Rhode Island’s claims, describing the lawsuit as unfounded. A company spokesperson said Meta works with law enforcement agencies to disrupt criminal networks and continuously develops tools to detect fraudulent advertising.
The company maintains that scams harm users, legitimate businesses and the long-term credibility of its platforms. Meta also argues that Rhode Island’s lawsuit overlooks its extensive efforts to identify and remove deceptive advertisements.
The allegations have not been proven, and the company will have an opportunity to contest them in court. Rhode Island filed the case under its Deceptive Trade Practices Act, which prohibits unfair or misleading commercial conduct.
The state is seeking financial penalties, compensation for affected consumers, recovery of allegedly improper profits and court-ordered changes to Meta’s practices. One important legal question involves Section 230 of the federal Communications Decency Act, which generally protects online platforms from liability for certain content created by third parties.
Legal experts suggest the outcome could depend on whether Meta merely hosted fraudulent advertisements or actively participated in creating, targeting and distributing them. The distinction could have significant consequences for the broader technology industry.
Rhode Island’s lawsuit follows a similar case filed by California’s Santa Clara County in May. It also adds to growing scrutiny of Meta over consumer privacy, child safety and the responsibilities of digital platforms. For regulators, the case represents an attempt to establish stronger accountability for companies whose advertising systems reach billions of users.
For consumers, it raises fundamental questions about whether social media platforms are doing enough to prevent financial exploitation. The lawsuit could become an important test of whether technology companies can face legal responsibility when their advertising systems allegedly help fraudulent businesses reach vulnerable consumers.
