Meta sued by US Virgin Islands over scam ads, child safety concerns

The U.S. Virgin Islands filed a lawsuit against Meta that accused the firm of projecting billions in revenue from scam advertisements and misleading the public on platform safety for children and adults.

Meta denies allegations and cites reduced scam reports and commitment to youth safety

As reported by Reuters, the attorney general of the U.S. Virgin Islands has sued Meta Platforms, accusing the Facebook and Instagram owner of deliberately profiting from advertisements for scams and failing to keep its social media platforms safe for children.

“Meta knowingly and intentionally exposes its users to fraud and harm. It does so to maximize user engagement and, in turn, its revenue,” states the lawsuit, which was filed in the Superior Court of the Virgin Islands on St. Croix.

The lawsuit repeatedly cites an article by Reuters last month that revealed how Meta internally projected 10% of its 2024 revenue (about $16 billion) coming from scam ads, illegal gambling, and banned products.

Based on a cache of internal company documents, the article also reported that Meta doesn’t block advertisers suspected of scams unless its algorithms are 95% certain that the marketer is engaging in misbehavior.

Following the story, two U.S. senators called on the Securities and Exchange Commission and the Federal Trade Commission to look into the matter and “pursue vigorous enforcement action where appropriate.”

The Virgin Islands lawsuit seeks penalties for violating its consumer laws. In a statement, Attorney General Gordon C. Rhea said it “marks the first effort by an attorney general to address reports of rampant fraud and scams on Meta’s platforms.”

“Meta repeatedly touts the ‘safety’ of its platforms to its users, parents, regulators, and Congress,” the Virgin Islands lawsuit states. “Meta consistently, and intentionally, fails to implement the policies it writes.”

According to the media outlet, Reuters reported in August that an internal Meta document outlining its policies on chatbot behavior permitted the company’s artificial intelligence creations to “engage in child conversations that are romantic or sensual.”

While Meta responded by saying it had removed portions of the guidelines that allowed chatbots to indulge in that sort of conversation.

In response to the lawsuit, Meta spokesman Andy Stone referred Reuters to past company statements calling allegations that it has failed to protect consumers baseless.

“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, adding that scam reports from users of Meta’s platforms have fallen by half over the last 18 months.

Stone said that the claims regarding Meta’s failure to make the platform safe for young users were also without merit.

“We strongly disagree with these allegations and are confident the evidence will show our longstanding commitment to supporting young people,” said Stone.

Additionally, the recent lawsuit against the tech giant adds to growing scrutiny of online advertising practices.

Regulators continue to examine how major platforms police fraudulent content and advertiser behavior besides operations.