The Attorney General of the U.S. Virgin Islands, Gordon C. Rhea, has filed a lawsuit against Meta Platforms Inc., the parent company of Facebook and Instagram, accusing the tech giant of knowingly profiting from fraudulent advertisements while failing to protect users, particularly children. Filed in the Superior Court of the Virgin Islands on St. Croix, the complaint alleges that Meta intentionally exposes users to fraud and harm to maximize user engagement and advertising revenue. The lawsuit claims Meta projected that about 10% of its 2024 revenue—roughly $16 billion—would come from ads promoting scams, illegal gambling, and banned products. It further states that Meta only blocks suspected fraudulent advertisers if its algorithms are 95% certain of wrongdoing, allowing harmful content to persist.
The suit highlights Meta’s alleged misleading statements about platform safety, noting that the company publicly touts protections for users, parents, regulators, and Congress, yet consistently fails to enforce its own policies. This marks the first effort by any U.S. attorney general to directly tackle rampant fraud and scams on Meta’s platforms, which affect Virgin Islands residents, including vulnerable elderly users and tens of thousands of children and teens.
Meta Denies Claims, Cites Anti-Fraud Efforts
In response, Meta spokesman Andy Stone rejected the allegations as baseless, referring to prior company statements. He emphasized that Meta aggressively combats fraud and scams because neither users nor legitimate advertisers want such content. Stone noted that user-reported scam incidents on Meta’s platforms have declined by half over the past 18 months. The lawsuit seeks civil penalties for violations of Virgin Islands consumer protection and fraud laws. The case builds on a November 2025 Reuters investigation into Meta’s internal documents, which prompted calls from U.S. senators for federal probes by the SEC and FTC.