BY COMFORT OGBONNA
The attorney general of the U.S. Virgin Islands has filed a lawsuit against Meta Platforms, accusing the parent company of Facebook and Instagram of deliberately allowing fraudulent advertising to flourish on its platforms and failing to adequately protect children and other users from harm.
Filed in the Superior Court of the Virgin Islands on St. Croix, the lawsuit alleges that Meta knowingly permits scams, illegal activities, and harmful content because they drive higher engagement and, ultimately, greater revenue. According to the complaint, the company prioritizes profits over user safety by allowing deceptive and dangerous advertisements to remain visible for extended periods.
“Meta knowingly and intentionally exposes its users to fraud and harm. It does so to maximize user engagement and, in turn, its revenue,” the lawsuit states, arguing that this approach has caused widespread consumer harm across Meta’s platforms.
The legal action references a recent investigative report that detailed how Meta internally projected that roughly 10% of its 2024 revenue—estimated at about $16 billion—would come from advertisements linked to scams, illegal gambling, and banned products. The report, based on internal company documents, also revealed that Meta often does not block advertisers suspected of fraud unless its automated systems reach a very high level of certainty that wrongdoing is occurring.
In the wake of those revelations, two U.S. senators urged federal regulators, including the Securities and Exchange Commission and the Federal Trade Commission, to investigate the matter and take enforcement action where warranted. The Virgin Islands lawsuit now seeks financial penalties under local consumer protection laws, positioning the case as a landmark effort by a U.S. attorney general to confront what it describes as rampant fraud on major social media platforms.
Attorney General Gordon C. Rhea said the lawsuit represents the first attempt by a territorial attorney general to directly address reports of widespread scams and deceptive practices on Meta’s services. He added that the action is intended to hold the company accountable for what the government views as systemic failures to protect consumers.
Beyond fraud, the lawsuit also accuses Meta of misleading the public, parents, regulators, and lawmakers about the safety of its platforms, particularly for children and young users. It alleges that while Meta publicly promotes strong safety policies, it routinely fails to enforce them in practice.
“Meta repeatedly touts the ‘safety’ of its platforms to its users, parents, regulators, and Congress,” the complaint says. “Meta consistently, and intentionally, fails to implement the policies it writes.”
Meta has strongly denied the allegations. Company spokesman Andy Stone said the claims are baseless and reiterated Meta’s position that it actively works to combat fraud and scams across its platforms. He said the company has invested heavily in detection systems and enforcement teams, noting that reports of scams from users have dropped by about half over the past 18 months.
“We aggressively fight fraud and scams because people on our platforms don’t want this content, legitimate advertisers don’t want it, and we don’t want it either,” Stone said. He also rejected allegations that Meta has failed to protect younger users, stating that the company has a longstanding commitment to youth safety and wellbeing.
Meta’s handling of child safety has drawn scrutiny in recent months following reports that internal policy documents once allowed company-developed chatbots to engage minors in conversations described as romantic or sensual. After those reports emerged, Meta said it removed sections of the guidelines that permitted flirtatious or romantic roleplay involving minors.
The Virgin Islands case adds to growing legal and regulatory pressure on Meta as governments worldwide increasingly question whether large social media platforms are doing enough to prevent fraud, protect children, and place user safety ahead of profit.
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