ST. CROIX, U.S. Virgin Islands — The U.S. Virgin Islands’ Department of Licensing and Consumer Affairs (DLCA), represented by Attorney General Gordon C. Rhea, filed a Meta lawsuit in the Superior Court of the Virgin Islands accusing Meta Platforms Inc. of profiting from scam advertising and failing to protect children and other users on Facebook and Instagram, Dec. 29, 2025.
The complaint accuses Meta of violating the territory’s Consumer Protection Law of 1973 and the Consumer Fraud and Deceptive Business Practices Act and seeks injunctions, civil penalties and disgorgement, according to the filing.
In a news release announcing the case, officials said the lawsuit is intended to protect teens and children who use Facebook and Instagram and to confront what they described as “rampant fraud and scams” across Meta’s platforms. Rhea said the Meta lawsuit “marks the first effort by an attorney general to address reports of rampant fraud and scams on Meta’s platforms.”
What the Meta lawsuit alleges
According to the complaint, the case alleges Meta’s ad systems and enforcement choices allowed scammers to buy and target ads for fake investment schemes, illegal gambling and other prohibited offers while the company collected revenue from those campaigns. In the Meta lawsuit, the DLCA commissioner also argues Meta’s products and recommendation systems can expose minors to addiction-like use patterns and to adults who seek to groom or exploit children.
“Meta knowingly and intentionally exposes its users to fraud and harm. It does so to maximize user engagement and, in turn, its revenue,” the filing states.
The lawsuit cites internal documents and prior reporting that estimated Meta projected roughly $16 billion — about 10% of its 2024 revenue — could come from ads tied to scams and banned goods. It also alleges Meta sometimes kept suspected bad actors advertising unless the company’s automated systems reached a very high confidence level that an advertiser was running scams.
Meta disputes the allegations. “We aggressively fight fraud and scams because people on our platforms don’t want this content … and we don’t want it either,” company spokesman Andy Stone told Reuters, adding that scam reports have fallen by about half in the past 18 months.
How the Meta lawsuit fits into a broader crackdown
The Virgin Islands case arrives as Meta faces intensifying scrutiny over both child safety and online fraud. A Reuters investigation published in November described internal documents that mapped the scale of scam advertising on Meta’s platforms and the economic tradeoffs the company weighed in enforcement decisions.
After that report, U.S. senators asked federal regulators to investigate Meta’s handling of scam advertising and whether its disclosures and controls were adequate, according to another Reuters report.
The territory’s lawsuit also follows years of litigation by state attorneys general focused on youth safety. In 2023, dozens of states sued Meta, accusing the company of designing features that can be addictive for young users and misrepresenting risks to parents and the public, the Associated Press reported.
The Virgin Islands has not said when it expects a first court hearing. The Meta lawsuit seeks injunctive relief and monetary penalties, setting up another test of how far consumer-protection law can reach into the business practices that underpin social media platforms.
