Meta Held Liable for Scam Ads Using Fake Celebrity Endorsements on Instagram and Facebook
A German court has delivered a major ruling against Meta over fraudulent ads on Instagram and Facebook, after scammers repeatedly used the name and images of Thomas Kehl, the well-known face of the personal finance platform Finanzfluss, to promote fake investment schemes.
The scam followed a familiar pattern. Users saw an ad featuring a trusted public figure, clicked through to what appeared to be a promising investment opportunity, and were then redirected to a WhatsApp group. Inside, they were presented with supposedly safe financial tips. In reality, the groups were part of a fraud operation, and victims lost money after trusting the fake endorsements.
On September 16, the Regional Court of Frankfurt am Main ruled that Meta must stop allowing these impersonation ads, provide information, and pay damages. The case is listed under file number 2-06 O 234/25.
The decision could have consequences far beyond this single case, especially for platforms that use algorithms to decide which posts and ads users see.
According to the court, Finanzfluss and Thomas Kehl had taken extensive steps to stop the fraudulent ads. They submitted reference images through Meta’s Brand Rights Protection Tool, reported around 256 violations in one month, and even assigned a full-time employee to monitor new fake profiles and ads.
Despite those efforts, takedowns were slow. Some reported content remained online for 14 days, others for 20 days, and one case reportedly stayed up for 62 days. As soon as one fake profile or ad disappeared, another would appear. Some versions even used deepfake video content to make the scam look more convincing.
The court found that Meta could not simply claim to be a neutral hosting provider in this situation. Until now, large platforms have often relied on legal protections that limit their responsibility when users upload illegal or harmful content, as long as the platform acts after being notified.
But the Frankfurt court took a different view. It said Meta’s advertising system does not merely host content passively. Instead, Meta operates an ad auction and uses its own criteria to decide which users see which advertisements. The court also pointed to ranking algorithms that determine how regular posts are distributed.
In other words, Meta is not just storing content. It is actively shaping how that content spreads.
That distinction matters because the court said a platform that decides the conditions under which content is distributed may lose the protection normally granted to passive hosts under Article 6 of the Digital Services Act. The ruling relied in part on a June decision by the Court of Justice of the European Union, which found that algorithmic distribution can affect whether a platform qualifies for hosting exemptions.
As a result, Meta was treated not merely as an intermediary, but as a party responsible for the spread of the scam ads. This opens the door to damages and financial compensation for Kehl. Future violations could result in penalties of up to 250,000 euros each, while the court set the amount in dispute at 300,000 euros.
The judgment also draws an important line between algorithm-driven platforms and services where users choose what they see. The court specifically limited its reasoning to services that rank and distribute content through algorithms.
That means the ruling does not automatically apply to every online platform. Traditional forums and purely chronological feeds, where users see content in the order it is posted, are treated differently. The court mentioned services such as Mastodon and Bluesky as examples of platforms where a chronological feed may not involve the same level of provider control.
This creates a clear legal message: if a platform uses algorithms to decide what gets visibility, it may also carry greater responsibility for the harm caused by that distribution.
However, the ruling does not directly compensate people who lost money after clicking on the fake ads. The plaintiffs in this case were the people whose identity and reputation were misused, not the investors who were defrauded.
Victims who transferred money to scammers still have to pursue the fraudsters themselves, which is often extremely difficult. Many of these operations are run from abroad, use fake identities, and disappear quickly once money has been collected.
Still, the ruling may help reduce future harm. The injunction covers not only the exact fake profiles already identified, but also very similar versions. That includes accounts with slightly changed names, added numbers, or special characters. This means the plaintiffs do not need to file a new case every time scammers create a near-identical copy.
For users, the warning signs remain the same. Investment ads on social media featuring celebrities, influencers, financial experts, or well-known public figures should be treated with extreme caution. If the ad redirects to a WhatsApp or Telegram group, that is one of the clearest red flags.
Scammers are becoming more sophisticated. Fake ads can use realistic branding, stolen photos, convincing layouts, and even deepfake videos. Some phishing campaigns have also shown that fraudulent messages can appear highly authentic, including cases where emails seemed to come from legitimate sender addresses.
Meta does use automated systems to detect scams, and WhatsApp includes protections that flag suspicious messages from unknown senders. But these tools are not enough to catch every fraudulent campaign, especially when scammers constantly change names, images, and account details.
The Frankfurt ruling is not final. Meta can appeal to the Higher Regional Court of Frankfurt, and the broader legal question of algorithmic control may eventually reach Germany’s Federal Court of Justice.
Even so, the decision is already significant. It challenges the idea that major social media platforms can profit from targeted advertising systems while avoiding responsibility for how those same systems spread fraudulent content.
For anyone using Instagram or Facebook, the lesson is simple: be skeptical of any investment opportunity promoted through a social media ad, especially if it uses a familiar face and pushes you into a private chat group. If it promises easy money, guaranteed returns, or insider access, it is likely not an opportunity. It is probably a scam.
