Watch out for financial scams on social media

Many of us turn to social media for financial advice and information these days - but that makes it very attractive to scammers.

Comparison site BrokerChooser looked at 1,200 financial adverts on platforms owned by Meta, such as Facebook and Instagram, and found that 7.5% were fraudulent.

Meanwhile, a third (33%) of these were classed as high risk.

The adverts were found to have all sorts of issues, such as:

• making exaggerated claims
• putting pressure on users by presenting time-limited offers
• not having sufficient disclaimers warning of the dangers of investing

“Social media has become a fertile hunting ground for financial scammers, reaching billions of users online,” said Adam Nasli from BrokerChooser.

Online financial advice can be misleading

BrokerChooser’s analysis backs up our own research.

We recently partnered with Lowell to find out how much financial advice and information given on social media was accurate, and of the 981 pieces of content we looked at:

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

Common issues we saw included:

• not highlighting the potential costs, downsides or consequences of certain debt solutions - 69.79%
• overly generic debt advice that doesn’t consider individual circumstances - 64.22%
• claiming unrealistic outcomes - 29%
• promoting a specific product or service - 24.96%

And perhaps most worryingly, 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.

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

Millions of people in the UK are active on social media, with many spending hours scrolling their timelines every single day.

So even just one misleading, inaccurate or fraudulent piece of financial advice can quickly reach a huge audience.

Thankfully, there are a few steps you can take to make sure you’re getting accurate and reliable advice.

Check for FCA accreditation

Look 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.

Do your own research

If an advert is pushing a specific financial product, look beyond social media for reviews and comments.

Be wary of high-risk investments

Don’t rush into high-risk investments like cryptocurrencies or forex trading, as you might lose lots of money if it goes wrong.