In a landmark legal action that expands ongoing scrutiny of Meta Platforms Inc., the U.S. Virgin Islands Department of Justice (VIDOJ) filed a lawsuit against the company and its subsidiaries on December 29, 2025, accusing it of deliberately profiting from scam advertisements while failing to safeguard children and vulnerable users on Facebook and Instagram. The suit, lodged in the Superior Court of the Virgin Islands on St. Croix, marks the first by an attorney general to directly target Meta's alleged facilitation of widespread online fraud alongside child safety concerns.
Attorney General Gordon C. Rhea announced the filing, emphasizing the need to protect tens of thousands of Virgin Islands teens and children who use the platforms, as well as residents victimized by scams, particularly the elderly. The complaint alleges violations of the territory's Consumer Protection Law of 1973 and the Consumer Fraud and Deceptive Business Practices Act, seeking injunctive relief, civil penalties, and disgorgement of ill-gotten profits.
“With this lawsuit, the Virgin Islands not only joins 42 other state attorneys general who have taken Meta to court for its failures to protect children and to honestly disclose the risks on its platforms, but expands their efforts by seeking to hold Meta accountable for knowingly facilitating, failing to address, and richly profiting from widespread fraud on its platforms,” the VIDOJ stated.
Central to the allegations is Meta's purported prioritization of revenue over user safety. The lawsuit claims that the company detected fraudulent ads but allowed them to continue running, often charging scammers higher fees. It further asserts that Meta internally projected approximately 10% of its revenue—roughly $16 billion—from fraudulent advertisements and banned products, while acknowledging that its platforms facilitated about one-third of successful scams in the United States. Fraudsters allegedly leveraged Meta's algorithms and user data to target vulnerable groups, such as the elderly.
On child protection, the suit accuses Meta of designing addictive features that hinder teens from limiting screen time, contributing to mental health issues including anxiety, depression, self-harm, and suicidal ideation. It claims the company misled the public, parents, regulators, and Congress about platform safety despite internal knowledge of harms.
The Virgin Islands action builds on a multistate coalition of over 40 attorneys general suing Meta for similar child safety failures, but uniquely incorporates fraud claims. This dual focus highlights broader criticisms of Meta's business model, where advertising drives the vast majority of revenue.
Meta has faced intensifying pressure in 2025 over its handling of fraudulent content. Internal documents, revealed in investigative reporting, showed the company grappling with enforcement while protecting revenue streams. Despite these challenges, Meta has touted improvements in scam detection.
In a broader statement on December 3, 2025, during the Global Anti-Scam Summit, the company reported removing more than 134 million scam ads across its platforms in 2025. It also highlighted disrupting nearly 12 million accounts linked to organized scam operations in the first half of the year, expanding facial recognition for celebrity impersonation scams, and collaborating with law enforcement globally.
Meta spokesman Andy Stone, responding to the lawsuit, referred to prior statements rejecting allegations of inadequate consumer protection. “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, noting a halving of user scam reports over the past 18 months.
The lawsuit arrives amid heightened regulatory and legislative attention to online fraud and youth mental health. U.S. lawmakers have probed Meta's practices, with some calling for federal investigations following reports on scam revenue projections. Consumer advocates argue that platforms must bear greater responsibility for content moderation in an era of sophisticated AI-driven scams.
For Virgin Islands residents, the case underscores local vulnerabilities in a digital landscape dominated by global tech giants. The territory, with its relatively small population, relies heavily on social media for connectivity, making platform harms particularly acute.
As the litigation proceeds, it could set precedents for territorial jurisdictions and influence national debates on tech accountability. Meta continues to invest in anti-fraud technologies, including AI enhancements and industry partnerships, but critics contend systemic changes are needed to prioritize safety over profits.
This development caps a year of legal battles for Meta, reflecting persistent tensions between innovation, revenue generation, and societal impact in the social media industry.
