Facebook and Instagram are failing to protect users from dodgy investment ads, Which? research finds
Consumers are still being shown misleading and potentially fraudulent investment adverts on Facebook and Instagram, new Which? research has found.
Our investigation discovered that risky investment adverts are rife on social media, putting consumers at risk of financial and emotional harm.
Here, we outline the findings of our report into dodgy ads and call for the government to pass the Online Safety Bill into law without any further delays.
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Dodgy investment ads remain rife on social media
Repeat offenders are able to persistently post dodgy adverts on Facebook and Instagram, meaning consumers could be misled into making risky investment choices, and in the worst cases falling victim to fraud.
We worked with Demos Consulting to analyse adverts on Meta’s ad library, which shows the ones that are visible to Facebook and Instagram users. We searched for investment adverts with clear risk factors, such as those that failed to include risk warnings or promised life-changing returns.
Overall, we found a host of risky investment adverts on both platforms. One collection of adverts we found particularly concerning was for a piece of software called Tesler.
What is Tesler?
Twenty adverts for Tesler each raised eight serious risk flags, such as not having a risk warning and promising sensational returns.
When our researcher clicked on an ad, they were prompted to enter their contact details. Within an hour, they were called by a ‘representative’ of the company and were pressured to set up a trading account amid claims that its ‘sophisticated algorithm...plays the trade with an 87% success rate’.
The Financial Conduct Authority (FCA) has previously issued a warning about a scam investment company using the brand name Tesler and impersonating a regulated trading company based in the UK. Additionally, the use of the name Tesler, with its similarities to the automotive brand Tesla, may also be confusing people and helping to draw in victims. Together, these factors suggest that these adverts are likely to be a scam.
In total, we collected 39 unique adverts mentioning Tesler, and additional searches confirmed that adverts were still running on Meta this month. Which? was unable to find contact details for Tesler.
Property and crypto ads dominate listings
Of our initial snapshot of 1,064 adverts on Meta, 484 were investment-related. About half were for investment products, and the rest offered investment ‘services’ such as tips, training and advice.
The most common investment product ads were property related (25%). This was followed by ads for cryptoassets such as cryptocurrencies and non-fungible tokens (22%), both of which are unregulated. Finally, 12% of products advertised didn’t fit into any category, often promising high returns without clarifying how they might be obtained.
Which? also found a small number of adverts for binary options, a form of trading banned in the UK in 2019. The FCA has previously warned that any firm offering binary options services is probably a scam.
In total, 89 adverts raised three or more red flags.
- Find out more: how to spot an investment scam
Platforms must be more transparent over ads
In addition to this research, we trained algorithms to search for risky adverts, using four specific risk factors. Of a sample of more than 6,300 adverts, our algorithm was able to pinpoint 186 with risk flags, with an accuracy rate of 77-91%.
Our research demonstrates that platforms could do better at deploying their technology to create algorithms that detect and remove harmful adverts at scale. However, platforms would still need human intervention to review a proportion of those adverts flagged based on a risk framework.
Meta is not alone in facing issues with misleading and fraudulent online advertising. Which? investigated Meta because it is more transparent than other online platforms about the advertising present on its services.
We believe that Meta and other platforms should look to increase and improve transparency further, so that the safety and quality of adverts can be independently scrutinised.
A Meta spokesperson said: ‘We removed a number of the ads brought to our attention for breaking our rules, many of which had already been disabled prior to being contacted by Which?. Promoting financial scams is against our policies and we're dedicating significant resources to tackling this industry-wide issue on and off our platforms. We recently started rolling out a new process that requires financial services advertisers targeting users in the UK to be authorised by the FCA.’
Government must pass Online Safety Bill into law
Rocio Concha, Which? director of policy and advocacy, says: ‘It is extremely worrying that misleading and potentially fraudulent investment adverts are still being shown to Facebook and Instagram users, putting consumers at risk of immense financial and emotional harm.
‘If a consumer group and another charity can design algorithms and uncover these adverts, then tech giants should be able to create effective systems to do the same job on a bigger scale.
‘The government must take a crucial step in the fight against fraud by ensuring the Online Safety Bill is passed into law without further delays. Otherwise we could be waiting even longer for alternative action to tackle online fraud infiltrating the world's biggest search engines and social media sites.
‘The government’s Online Advertising Programme should also build on the Online Safety Bill and move from the current reactive takedown approach to one that prevents scammers entering the system in the first place. It should force online platforms and other players in the advertising ecosystem to protect consumers from fraudulent and misleading adverts.’
