Rhode Island Sues Meta, Alleging It Profited From Scam Advertising

Rhode Island sued Meta Platforms on Thursday, alleging that the company helped fraudulent advertisers reach consumers and collected revenue from their ads while publicly promising strong protections against scams.

Attorney General Peter F. Neronha’s office announced the Oct. 22 lawsuit in Providence County Superior Court under Rhode Island’s Deceptive Trade Practices Act. The state says Meta’s involvement extended beyond displaying advertisements to helping advertisers design, target and improve them.

Meta rejected the allegations. Spokesperson Andy Stone told Reuters the lawsuit was “unfounded” and said the company would fight it. He pointed to more than 159 million scam advertisements removed over the past year, expanded advertiser verification and new warnings intended to protect users from fraud.

According to the attorney general’s announcement, the lawsuit concerns advertisements promoting fake investments, impersonation schemes, false Medicare and Social Security benefit offers, and ineffective or dangerous health products.

The state alleges Meta supplied advertising tools that helped scammers identify and repeatedly approach consumers likely to respond. Older users were among the vulnerable groups identified by the attorney general’s office.

Rhode Island also alleges that Meta sometimes charged suspected fraudulent advertisers higher prices rather than removing their advertisements. The state argues that those practices conflict with the company’s public representations about its efforts to prevent fraud.

Meta, in its response to Reuters, said its work includes partnering with law enforcement to disrupt scam networks. The company has also disputed the characterization of its anti-fraud efforts in earlier Reuters reporting cited by the state.

Rhode Island is asking the court to order restitution for affected residents, impose civil penalties and require Meta to surrender gains attributable to the alleged unlawful conduct.

The requested relief also includes an injunction and the appointment of a receiver, auditor or monitor to oversee compliance with any court-ordered remedies.

Neronha’s office described Rhode Island as the first state to bring this type of scam-advertising lawsuit against Meta, following a similar action by California’s Santa Clara County.

The claims remain allegations. The announcement describes the relief the state is seeking, rather than a judgment establishing Meta’s liability.