TikTok has joined the defensive forces against crypto due to the concern of rising financial scams. It has announced an updated branded content policy to halt the advertisement of financial services and products worldwide. The short video application has banned all financial promotions by influencers on the platform, be it cryptocurrencies, share trading, pyramid schemes, loans, and credit cards, buy now pay later services, trading platforms, cryptocurrencies, and get rich quick schemes.
TikTok has taken a harsh stance against influencer marketing for financial investment schemes to prevent younger TikTok users from falling prey to misleading promotional content on the platform. An increase in questionable and problematic content around various financial service products, promoted by unauthorized, inexperienced influencers has become the cause of a hike in scams. The Financial Conduct Authority (FCA) has especially alerted the younger and more vulnerable viewers since they have already had an unpleasant history with TikTok’s unfiltered financial content.
“We are worried that some investors are being tempted – often through online adverts or high-pressure sales tactics – into buying higher-risk products that are very unlikely to be unsuitable for them,” the regulator said in March.
TikTok’s Financial Influencers Were a Growing Concern
Holly Mackay, CEO of Boring Money, a platform for investment and financial advice; has expressed her concerns about unfiltered, deceptive financial advice on the internet.
“The sole incentive for unqualified influencers to talk about financial products has been making money. With that removed, it still leaves the road open for those who want to help and inform… most of the big brands are still struggling to get their heads around Twitter, let alone work out TikTok, so this should just clean up those who were spouting dangerous rubbish for commercial gain.”, said Mackay.
After crypto advertisement’s “red alert” in the UK, the crackdown has seen a global social media expansion. Leading companies have announced their support for filtration of the promotion of financial products and services. Google for one has announced a campaign to take down misleading ‘save and invest’ fraudulent advertisements in the UK.
From 30th August onwards, businesses will be required to get authorization from the FCA or qualify for one of the ‘limited exemptions’ available to promote any financial products or services through Google.