The lawsuit, brought by the territory’s attorney general, accuses Meta of allowing fraudulent and harmful advertisements to flourish in order to drive engagement and maximise advertising revenue.

It alleges the company publicly promotes robust safety standards while failing to adequately enforce them in practice.

Meta has denied the allegations, stating it has significantly reduced scam-related reports on its platforms and remains committed to improving protections for young users. However, recent testing in Australia that involved reporting scam ads indicate that no action was being taken when the ads were reported.

The legal action has drawn renewed scrutiny globally, including in Australia, where many Facebook users have expressed hope that the Australian Government will take a firmer stance on platform accountability and follow the U.S. Virgin Islands’ lead.

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

Based on internal company documents, reports found that Meta does not block advertisers suspected of running scams unless its automated systems are at least 95% certain the advertiser is engaged in misconduct.

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.

Following publication of the report, two U.S. senators urged the Securities and Exchange Commission and the Federal Trade Commission to investigate the matter and “pursue vigorous enforcement action where appropriate.”

The Virgin Islands lawsuit seeks civil penalties for alleged violations of local consumer protection laws

Attorney General Gordon C. Rhea says the case “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.”

In August, Reuters reported that an internal Meta document detailing chatbot behaviour policies allowed the company’s artificial intelligence systems to engage children in conversations described as “romantic or sensual.”

Meta later said it had removed sections of the guidelines that permitted chatbots to flirt or engage in romantic role-play with minors.