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Consumers at risk from TikTok investing tips
Consumers at risk from TikTok investing tips
An alarming number of young people are getting investment ideas from social media influencers that are propagating misleading advice, according to new research.
Cryptocurrency trading platform Paxful analysed more than 1200 videos from finance influencers on popular social media platform TikTok and found that one in seven were misleading, in that they advised consumers to make specific financial decisions without carrying a disclaimer that the information was opinion only.
“We flagged any that encouraged users to buy specific assets, implied an investment would guarantee a profit, and urged users to invest a particular amount of their income,” the platform said.
The most common type of misleading content was around recommending specific investments, which accounted for 11 per cent of misleading videos, while 4 per cent claimed viewers would make a profitable return from a certain type of investment.
More than 60 per cent of investment recommendations were around specific companies.
“Blue-chip companies like Tesla, Amazon, and Alphabet were frequently highlighted as investment opportunities,” Paxful said.
A further 8 per cent of videos encouraged viewers to invest in ETFs while 5 per cent related to real estate or other assets.
The videos that were flagged as misleading had more than 28 million cumulative views and three million likes. More than half of the influencer accounts analysed had posted misleading content at least once, and these accounts had more than nine million followers altogether.
About 40 per cent of TikTok finance influencers had disclaimers in their bio, according to the research, while only 10 per cent appeared to have some kind of financial qualifications.
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