Rhode Island Attorney General Peter Neronha sued Meta Platforms in Providence Superior Court on October 22, alleging the company profited from scam advertising on Facebook, Instagram and WhatsApp. Reuters, which first reported the suit, says it is the first scam-ad case brought by a US state. Meta says it will fight the case and calls it unfounded.
What the lawsuit alleges
The complaint says Meta made money from billions of dollars in fraudulent advertising while telling users it was protecting them. It claims Meta's AI ad creation tools helped scammers build and optimise ads, and that Meta charged suspected fraud advertisers higher fees rather than consistently blocking them.
It also argues Meta resisted requirements to verify advertisers, so a banned advertiser can return with a new email address or phone number. One example cited is an ad claiming to reverse Alzheimer's in 45 days, with more than 2,000 versions in the Ad Library.
- Scam ads impersonating public figures and banks
- Targeting of elderly users
- Ads for deepfake pornography apps
- Weak advertiser verification and easy re-entry after bans
What Rhode Island wants and how Meta responded
The state is seeking civil penalties per violation, restitution for consumers, disgorgement of profits and a court order requiring Meta to deal with the scam ads it delivers. Santa Clara County in California filed a similar suit in May.
Meta spokesperson Andy Stone said the attorney general refused to engage with the company and hired an out-of-state private law firm. Meta says it removed more than 159 million scam ads in the past year and points to expanded advertiser verification and new anti-fraud warnings.
Why legitimate advertisers should care
The core complaint targets how easily new or banned advertisers get into the auction. Legal and regulatory pressure on that point usually turns into product changes: more identity and business verification, slower trust for new accounts, and more automated restrictions on ads that resemble scam patterns, such as health miracle claims, financial promises or celebrity likenesses.
That tends to produce false positives. Fresh accounts, new pages and new payment methods are exactly the signals that look risky to an enforcement system tuned to catch returning bad actors.
How to prepare
Complete business verification and keep legal names, domains and payment details consistent across your portfolio. Avoid creative that leans on unverifiable outcomes or public figures you don't have rights to. Build in time for review on new accounts, and keep backup capacity so a restriction doesn't stop a campaign mid-flight. Power Ads supplies agency ad accounts on its corporate cards with a 24/7 operator for replacements, but it does not change Meta's review: compliant creative still matters.
What it means for you
- A first state lawsuit over scam ads puts advertiser verification under direct pressure.
- Expect stricter checks and slower trust for new accounts, pages and payment methods.
- Keep business verification and identity details consistent across every asset.
- Drop miracle claims and unlicensed public-figure creative before automated systems flag them.
