ACCC targets 'manipulative' social media influencers
The Australian Competition and Consumer Commission (ACCC) has targeted social media influencers who use misleading testimonials and endorsements.
The ACCC says it's "sweeping" more than 100 social media influencers from over 150 consumer tip-offs for misleading endorsements.
The ACCC is investigating social media platforms like Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch. The consumer watchdog is also considering the involvement of advertisers, markers, brands, and social media platforms in facilitating misconduct.
ACCC chair Gina Cass-Gottlieb commented: "The number of tip-offs reflects the community concern about the ever-increasing number of manipulative marketing techniques on social media, designed to exploit or pressure consumers into purchasing goods or services."
Further, ensuring consumers can make informed purchasing decisions is crucial for the success of online markets in today's economy, she says.
The ACCC's crackdown on social media influencers is supported by assistant treasurer and minister for financial services Stephen Jones, who emphasised the importance of protecting consumers from false claims and deceitful sales tactics.
"Commercial arrangements need to be disclosed when influencers recommend a product so consumers can make fair and informed decisions," says Jones.
Meanwhile, the latest VanEck Australian Investor survey shows that investors have shunned "finfluencers" for expert advice on products.
Most investors (72%) don't use social media for investment research and only 24% support the use of finfluencers to recommend products, the survey said.
Moreover, investors who use social media for investment research and want finfluencers to recommend products are evenly spread across age groups, but mostly earn less than $150,000 annually.
The most popular platforms for investment research on social media were Facebook and Reddit.
VanEck chief executive and managing director Arian Neiron says: "Our conclusion is that investors want to see finfluencers with an AFSL."
"They [investors] want assurance that product recommendations are coming from experts that have genuine understanding of asset classes, markets, economic drivers, and that products recommended need to address the personal objectives of the investor."
According to Neiron, social media can play a key role in increasing financial literacy and getting people invested in investing. However, professional advice should come from verified experts, he says.
This article first appeared on Financial Standard
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