The attorney general of the U.S. Virgin Islands has filed a lawsuit against Meta Platforms, alleging the social media giant profits from scam advertisements and fails to protect users, including children, on its platforms.
The case was filed in the Superior Court of the Virgin Islands on St. Croix. It alleges that Meta knowingly exposed users to fraud to boost engagement and increase advertising revenue.
“Meta knowingly and intentionally exposes its users to fraud and harm,” the lawsuit states. “It does so to maximise user engagement and, in turn, its revenue.”
The complaint extensively cites a recent Reuters investigation that reported Meta internally projected that nearly 10 per cent of its 2024 revenue—around $16 billion—would come from advertisements linked to scams, illegal gambling, and banned products.
Meta is sued by US Virgin Islands over ads for scams, dangers to children https://t.co/WI2jqm24DH https://t.co/WI2jqm24DH
— Reuters (@Reuters) December 31, 2025According to the report, Meta allowed many suspicious advertisers to operate unless its automated systems reached a 95 per cent confidence level that misconduct was taking place. Following the publication, two U.S. senators urged the Securities and Exchange Commission and the Federal Trade Commission to investigate the matter and, if necessary, take enforcement action.
The Virgin Islands lawsuit seeks financial penalties under local consumer protection laws. Attorney General Gordon C. Rhea said the case marks the first time an attorney general has acted on reports of widespread fraud across Meta’s platforms.
The lawsuit also alleges that Meta misled the public about safety measures on Facebook and Instagram. It claims the company promotes the safety of its platforms to users, parents, regulators, and lawmakers, yet fails to enforce its own policies fully.
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In response, Meta spokesperson Andy Stone rejected the allegations and referred to earlier company statements. He said Meta actively combats scams and fraud because users and legitimate advertisers do not want such content.
Stone added that reports of scams from users have declined by about 50 per cent over the past 18 months. He also dismissed claims that Meta failed to protect young users, saying the company remains committed to child safety.
Separately, Reuters reported in August that internal Meta guidelines once allowed artificial intelligence chatbots to engage minors in romantic or sensual conversations. Meta later said it removed those sections and updated its policies to prevent such interactions.
The case adds to mounting legal and regulatory pressure on Meta as governments worldwide scrutinise how major tech platforms handle online fraud and child protection.
