Rhode Island sues Meta over scam ads on Facebook and Instagram

Estimated reading time: 13 minutes.

Key facts

What happened: On October 22, 2026, Rhode Island Attorney General Peter F. Neronha sued Meta Platforms, the owner of Facebook, Instagram, Messenger and WhatsApp, over scam advertising on its apps.
The core claim: The state says Meta told the public it aggressively fights scam ads while knowingly earning billions of dollars from them, and that its own ad tools helped scammers build and target those ads.
The law: The lawsuit is brought under Rhode Island's Deceptive Trade Practices Act, which allows a civil penalty of up to $10,000 per violation.
What the state wants: A ruling that Meta broke the law, court orders requiring changes, restitution for affected Rhode Island consumers, civil penalties, disgorgement of profits and a court-appointed monitor or auditor.
Meta's response: A Meta spokesperson said the company has removed more than 159 million scam ads and accused the attorney general of hiring an out-of-state law firm to "concoct a lawsuit."
Who can get money: No one yet. This is a state enforcement lawsuit, not a class action. There is no settlement, claim form or deadline.
The case: State of Rhode Island v. Meta Platforms, Inc. and Instagram, LLC, Case No. PC-2026-05842, Rhode Island Superior Court, Providence County.

What Rhode Island filed

The Rhode Island Office of the Attorney General filed an 85-page complaint in Providence County Superior Court on Thursday, October 22, 2026. Court stamps on the document show it was submitted at 11:09 a.m. and assigned Case Number PC-2026-05842. The Superior Court is Rhode Island's main trial court for civil cases of this size.

The attorney general's office says Rhode Island is the first state to sue Meta over scam advertising. It follows a similar lawsuit filed in May 2026 by Santa Clara County, California, according to the office and Reuters. Engadget reported that the Consumer Federation of America, a consumer advocacy group, also sued Meta over scam ads in April.

The complaint frames the case as a gap between what Meta says and what it does. In the state's words, the action "arises from the gap between what Meta tells consumers about fraud on its platforms and how Meta actually operates its advertising system to facilitate and amplify fraud."

"As alleged, Meta knowingly exposed vulnerable users to fraud and scams, and made enormous profits in doing so," Neronha said in a press release.

This is a state case, not a class action The attorney general is suing on behalf of the State of Rhode Island. Individual Facebook or Instagram users are not plaintiffs and do not need to sign up for anything. The state asks for restitution to Rhode Island consumers, but no court has ordered any payment.

Who the parties are

The State of Rhode Island. The plaintiff is the state, acting through Attorney General Peter F. Neronha, its chief law enforcement officer. In 2021, Neronha worked with the state legislature to restore the attorney general's power to enforce the Deceptive Trade Practices Act, according to his office. The office has since used the law against a residential solar company, a contractor and other businesses.

Meta Platforms, Inc. Meta, formerly Facebook, Inc., is a Delaware corporation based in Menlo Park, California. It runs Facebook, Instagram, Messenger and WhatsApp. These apps are free to use. Meta makes money by selling advertisers the chance to show ads to its users, and the complaint says it earned $200.97 billion in revenue in 2025, "virtually all" of it from advertising.

Instagram, LLC. Instagram is a wholly owned Meta subsidiary that operates the Instagram app. It is named as a separate defendant. The complaint treats several other Meta subsidiaries, including Facebook Holdings, Facebook Operations and Meta Payments, as part of the same "common enterprise."

Others named in the story. The complaint relies heavily on a series of 2025 Reuters investigations by reporter Jeff Horwitz based on internal Meta documents. It also cites data from the Federal Trade Commission (FTC), the federal agency that handles consumer fraud complaints, and the FBI.

How Meta ads are built and delivered

To follow the state's argument, it helps to know how advertising works on Meta's apps, as the complaint describes it.

Ads Manager. This is Meta's self-service system for buying ads. An advertiser supplies basic inputs such as text, images, a budget and a goal. The complaint says Meta's tools then help assemble the finished ad, choose who sees it, measure how it performs and steer more money toward the versions that work best.

Automated creative tools. The complaint describes "dynamic creative," which can combine an advertiser's images and headlines into up to 1,000 ad variations, and Advantage+, which Meta says can automatically adjust images, add music or text overlays and pick the version each viewer is most likely to respond to. A generative AI text feature can write up to five variations of an ad's main text and headline.

Targeting. Advertisers can aim ads at age groups, including users 65 and older, and at interests such as retirement planning, personal finance, investing and health. Meta's system then learns who engages with an ad and narrows the audience toward them.

The ad auction. Every time a user opens or scrolls a Meta app, Meta runs an instant auction among the ads eligible to be shown. The complaint says an ad's rank depends on the advertiser's bid, Meta's prediction of how likely the user is to act on it, and a measure of ad quality. The state argues this design favors ads that use the hallmarks of fraud, such as false urgency, unrealistic returns or fake celebrity endorsements, because those ads are engaging.

This matters because, according to the complaint, Meta has publicly placed responsibility for scam ads on "third-party scam advertisers." Rhode Island's position is that Meta "materially participates" in building and delivering them.

What the state alleges

These are allegations. No court has found them true, and Meta disputes the lawsuit.

Meta knew how much money scam ads made. Citing Reuters' reporting on internal documents, the complaint says Meta projected in 2024 that about 10% of its annual revenue, roughly $16 billion, would come from ads for scams or banned goods such as weapons, drugs and counterfeit products. It says Meta was aware that it showed users an estimated 15 billion ads with signs of fraud every day, and that ads presenting "higher legal risk," such as those impersonating brands or public figures, brought in $7 billion a year. A footnote notes that a Meta spokesperson called the 10% figure "overinclusive" but did not offer an updated number.

Meta tolerated suspected scammers and charged them more. The complaint says Meta allowed likely fraudulent ads unless its systems reached an "extreme certainty threshold," and charged suspected fraudsters higher rates instead of removing them. Citing Reuters, it says advertisers were allowed four to 32 "strikes" for financial fraud before being banned, while "High Value Accounts" were allowed more than 500.

Meta weighed fines against profits. According to a document reviewed by Reuters and cited in the complaint, Meta estimated fines of up to $1 billion from any regulatory settlement over scam ads, against about $3.5 billion it would earn every six months from those ads.

Enforcement was understaffed. The complaint says Meta ignored or wrongly rejected 96% of the roughly 100,000 valid fraud reports users submitted each week, according to a 2023 document described by Reuters. It also says Meta dissolved an internal team that had removed scam ads originating in China.

Meta's own tools helped scammers. The complaint describes a Reuters experiment in which a reporter submitted ads promising 10% weekly investment returns. Meta's system suggested 10 new variants, including AI-generated people and lines such as "Tired of living paycheck to paycheck?" The ads went live within about 20 minutes and drew more than 100 clicks in four days.

Older users are targeted. The complaint cites FBI figures showing victims over 60 lost more than $7.7 billion to fraud in 2025, and that the FBI received 2,700 fraud complaints from Rhode Island residents in 2025 reporting $71,960,439 in losses, including 581 complaints from residents over 60. It cites FTC data that 30% of people who reported losing money to a scam in 2025 said it began on social media, with more than $2.1 billion lost and Facebook accounting for the largest share.

Scams are still easy to find. Reuters reported that the complaint points to an ad promising to reverse Alzheimer's disease in 45 days, with more than 2,000 versions active in Meta's public Ad Library. It also describes ads for AI "deepfake" pornography apps and ads that used the name and image of a senior Bank of America executive to lure users into fake stock trades on WhatsApp. That last example comes from a separate federal class action in California, where the complaint says investors claimed more than $300 million in losses and a judge denied Meta's motion to dismiss.

Large parts of the public complaint are blacked out. Most of the redacted passages appear where the state quotes Meta's internal documents, so the full extent of the evidence the state relies on is not yet public.

Spotting the pattern the state describes The complaint lists common scam ad types: fake investment offers with very high returns, false Medicare and Social Security benefit offers, miracle health cures, and ads that impersonate celebrities, executives or banks. Treat any ad that pushes you to move a conversation to WhatsApp or another app, or to pay quickly, with extra caution.

The law behind the case

The state brings one main legal theory: that Meta violated Rhode Island's Deceptive Trade Practices Act, R.I. Gen. Laws § 6-13.1-1 and following sections. The law bans unfair or deceptive acts in trade or commerce.

To use it, the state must show Meta engaged in trade or commerce in Rhode Island. The complaint argues it does by opening accounts for Rhode Island users, collecting their data, selling ads aimed at them and charging fees on Facebook Marketplace sales.

Civil penalties. Under § 6-13.1-8, a violator must pay the state up to $10,000 per violation. The complaint does not state a total dollar figure. How violations are counted, for example per ad, per user or per statement, will be a central fight if the case reaches that stage.

Other remedies. The state asks for a declaratory judgment, which is a formal ruling that Meta broke the law; an injunction, which is a court order requiring Meta to change its practices; restitution, which returns money to people who lost it; disgorgement, which takes away profits gained through the alleged violations; and the appointment of a receiver, auditor or monitor to oversee compliance.

A common platform defense. Online platforms sued over user content often rely on Section 230 of the federal Communications Decency Act, which generally shields them from liability for content posted by others. Rhode Island's complaint focuses on Meta's own public statements and its own ad-building tools rather than only on the content of the ads. Meta has not yet filed its formal response, so its legal arguments are not known.

What Meta says

Meta spokesperson Andy Stone told Reuters that the company has removed more than 159 million scam ads, according to Engadget. "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.

Reuters reported that Meta has claimed progress on anti-scam efforts since its investigations were published in 2025. The complaint says Meta has publicly described itself as "always working to find, remove, and disrupt scammers."

Who is affected

The lawsuit concerns Rhode Island consumers who use Facebook, Instagram, Messenger or WhatsApp. If the state wins restitution, a court would decide later how any money is distributed. Nothing in the complaint or the attorney general's release sets up a claim process now.

People outside Rhode Island are not covered by this case. Santa Clara County's lawsuit and private suits in other courts raise similar claims but are separate.

Rhode Island has a separate, completed matter with Meta. The attorney general's office says the state will receive between $49.4 million and $64.5 million from an August 2026 multistate settlement with Meta worth up to $17.1 billion, which centered on child safety features on Instagram and Facebook. That settlement does not cover scam ads. Our coverage of New Mexico's $25 billion judgment against Meta explains another state case over Facebook's public statements.

If you lost money to a scam ad. Keep screenshots of the ad, the advertiser's page name, messages and payment records. You can report fraud to the FTC at ReportFraud.ftc.gov, to the FBI's Internet Crime Complaint Center and to your state attorney general. Rhode Island residents can contact the attorney general's consumer protection unit. Reporting does not make you part of this lawsuit.

If you want to find a case you can act on. See our list of class action cases you can join.

Timeline

Date	Event
2021	Rhode Island restores the attorney general's power to enforce the Deceptive Trade Practices Act
2023	Meta document cited by Reuters says it missed 96% of valid weekly user fraud reports
2024	Meta projects about 10% of revenue from scam and banned-goods ads, per Reuters
2025	Reuters publishes its investigations into Meta scam advertising
April 2026	Consumer Federation of America sues Meta over scam ads, per Engadget
May 2026	Santa Clara County, California, sues Meta over scam ads
August 2026	Multistate child safety settlement with Meta announced
October 22, 2026	Rhode Island files Case No. PC-2026-05842

What to watch next Meta's first formal response to the complaint is the next milestone. Companies sued in state court often ask a judge to dismiss the case or move it to federal court before any facts are tested, so the case is likely to take months to reach a ruling on the merits.

What happens next

Meta must be formally served with the complaint and then file a response. Under Rhode Island's Superior Court civil rules, an answer is due within 20 days of service unless the court sets a different schedule, and parties in large cases often agree to extend it. Meta could answer the claims, move to dismiss them, or try to move the case to federal court.

If the case survives early motions, the parties would exchange evidence in discovery. That process could make more of the redacted internal documents public, though courts often keep sensitive business records sealed.

The case could end in a settlement, a court ruling or a trial. Any penalty, restitution or injunction would come only after one of those outcomes.

What remains unclear

How much the state seeks. The complaint asks for penalties per violation but names no total.
What the redacted documents say. Many passages quoting Meta's internal records are blacked out.
Which judge will hear the case. The public complaint does not show a judicial assignment.
Meta's legal defenses. Meta has responded only through a spokesperson statement so far.
Whether other states will follow. Rhode Island is the first state, but it is not clear whether others are preparing similar suits.
How restitution would work. The state asks for it, but there is no plan for identifying or paying affected consumers.

This article is for information only and is not legal advice.

Frequently asked questions

Why is Rhode Island suing Meta?

Rhode Island says Meta misled the public by claiming it aggressively fights scam ads while knowingly earning billions of dollars from them, and that Meta's ad tools helped scammers create and target fraudulent ads. The state says this violates its Deceptive Trade Practices Act.

Is this a class action I can join?

No. The attorney general filed the case on behalf of the State of Rhode Island. There is no class, no claim form and no deadline for consumers to act.

Can I get money if I was scammed through a Facebook or Instagram ad?

Not from this case at this stage. The state asks the court to order restitution to Rhode Island consumers, but nothing has been ordered. Keep records of any losses and report them to the FTC and your state attorney general.

How much could Meta have to pay?

Rhode Island law allows a civil penalty of up to $10,000 per violation. The complaint does not give a total, and the amount would depend on how a court counts violations if the state wins.

What has Meta said about the lawsuit?

A Meta spokesperson said the company has removed more than 159 million scam ads and accused the attorney general of hiring an out-of-state firm to "concoct a lawsuit" that ignores Meta's anti-scam work.

Is this the same as the Santa Clara County lawsuit?

No. Santa Clara County, California, filed its own scam ad lawsuit against Meta in May 2026. Rhode Island's case is separate and is the first brought by a state.