The U.S. Virgin Islands has filed a lawsuit against Meta Platforms, accusing the company of turning a blind eye to scam ads and failing to protect children on Facebook and Instagram while earning billions in advertising revenue.
Filed in the Superior Court of the Virgin Islands on St Croix, the case claims Meta knowingly allows harmful and fraudulent adverts to circulate because they boost engagement and profits.
This is the first time a territorial attorney general has moved directly against the company over these issues.
“Meta knowingly and intentionally exposes its users to fraud and harm. It does so to maximise user engagement and, in turn, its revenue,” the lawsuit states.
At the heart of the case is reporting that revealed Meta internally expected around 10% of its 2024 revenue, roughly $16 billion, to come from scam ads, illegal gambling and banned products.
The same reporting showed that advertisers suspected of fraud were not blocked unless Meta’s internal systems reached a 95% certainty threshold, allowing many harmful ads to remain live.
Two U.S. senators urged the Securities and Exchange Commission and the Federal Trade Commission to step in and investigate the company’s advertising practices, calling for strong enforcement where needed. That now appears to be spilling beyond Washington and into the courts.
Virgin Islands Attorney General Gordon C. Rhea said the lawsuit “marks the first effort by an attorney general to address reports of rampant fraud and scams on Meta’s platforms.”
The case seeks penalties under local consumer protection laws and accuses Meta of misleading users, parents and regulators about how safe its platforms really are.
“Meta repeatedly touts the ‘safety’ of its platforms to its users, parents, regulators, and Congress,” the lawsuit states. “Meta consistently, and intentionally, fails to implement the policies it writes.”
More than 42 U.S. state attorneys general have already sued Meta over assertions that it has failed to shield young users from harmful content. The Virgin Islands case builds on that and could open the door for other territories to follow suit.
Child safety is a major theme. Earlier reporting also revealed complaints about internal guidelines governing Meta’s automated systems, which allowed them to “engage a child in conversations that are romantic or sensual.”
Meta later said it removed those sections, but the lawsuit argues that the company’s public assurances do not match its internal practices.
Meta responded with spokesman Andy Stone dismissing the accusations and pointing to earlier company statements rejecting the allegations.
“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,” he said. He added that reports of scams from users have fallen by half over the past 18 months.
On youth protection, Stone was equally firm. “We strongly disagree with these allegations and are confident the evidence will show our longstanding commitment to supporting young people,” he said.
