Most social media debt advice is misleading

Lots of people in debt will turn to social media for advice and information - but how much of what you see is accurate?

We recently partnered with Lowell to answer this question and our findings were alarming.

Of the 981 pieces of content we looked at on platforms like TikTok, Reddit and Facebook:

• almost two-thirds (64.22%) of debt advice was misleading
• almost all of it (98.27%) was unreliable

What’s wrong with the advice being given online?

We found several common issues across the social media posts we looked at, including:

Commercial interests influencing the advice

Almost a quarter (24.96%) of the debt advice we saw promoted a specific product or service.

In some cases, this was fairly innocent, such as pointing people towards specific debt advice charities or helplines.

But other posts encouraged people struggling with debt to sign up for specific 0% credit card accounts or follow certain YouTubers. 

And some went as far as promoting their own services as unofficial “financial advisors” promising to “clear debts”.

Unrealistic outcomes

Meanwhile, almost a third (29%) of posts claimed unrealistic outcomes, which might have given false hope to vulnerable people.

For example, some used language such as “guaranteed” or “no matter your situation”.

And some gave specific but extreme timeframes, such as “in seven days” or “in one month”.

That’s a problem because it can give people false hope that they can solve their debt problems quickly and easily.

This, in turn, means it can take them longer to look for realistic solutions.

A one-size-fits-all approach

Nearly two-thirds (64.22%) of debt advice was overly generic and didn’t consider individual circumstances.

For example, people were encouraged to seek a bankruptcy or an IVA, and some were advised to consolidate loans to one 0% credit card.

Meanwhile, there were posts that advised people in debt to simply budget better.

For some people, these will be appropriate options.

But that won’t be true for everyone, so blindly following this advice could lead to people getting into deeper financial problems.

Not mentioning the long-term consequences

Almost two-thirds (62.79%) of posts highlighted ways to deal with debt, but didn’t mention the potential costs, downsides or consequences of these approaches, such as what they could do to your credit score.

No credentials or disclaimers

Just 1.7% of social media posts giving debt advice had a relevant and verifiable credential.

So that means 98.3% lacked the training to support those with debt problems.

Meanwhile, 93.99% of debt advice posts didn’t feature a disclaimer clarifying that their content isn’t professional financial advice.

And 93.99% of debt-related content didn’t cite any third-party sources, so audiences couldn’t tell or check if claims being made are accurate, up to date or relevant. 

Where are social media users going for debt advice?

Many people are turning to online finance subreddits for advice and information, with some communities having almost two million members.

TikTok is also proving popular.

In fact, the hashtag #debtfreejourney has been used in around 378,100 videos, and more than 381,400 posts include the hashtag #debtfree.

Meanwhile, some debt support groups on Facebook are attracting thousands of members.

How can I be sure I’m getting good advice?

The sheer scale of these platforms means that even just one misleading comment could potentially reach a huge audience.

So if you’re struggling with debt, how can you be confident that you’re getting accurate and reliable advice?

Matthew Sheeran, debt advice specialist at Money Wellness, recommends looking for organisations that are regulated by the Financial Conduct Authority, with a proven track record in giving debt advice.

“Qualified advisers will provide personalised guidance, explain risks clearly and won’t pressure you to make hasty decisions,” he said.

“They’re also non-judgemental and confidential, so you shouldn’t feel ashamed or embarrassed about sharing your problems.”

Sheeran warned that social media is being “flooded with quick-fix solutions that often oversimplify complex financial issues” or promise “dramatic results”.

But this, he said, is because these platforms “reward content that’s fast, catchy and easy to share”, and that “this can come at the expense of accuracy”.

“We see firsthand how this misinformation can push people further into debt,” Sheeran commented.

“It reinforces why regulated, professional advice is so crucial. 

“Debt is complex, so a one-size-fits-all approach doesn’t work.”