Listen to this Post
The Rise of Risky Advice on Social Media
The digital age has given rise to a new wave of financial influencers — or finfluencers — who use platforms like Instagram, TikTok, and YouTube to dispense financial advice. But a recent warning from UK high street bank TSB reveals that many of these self-styled experts are doing more harm than good. Young people are increasingly falling victim to financial losses after trusting unregulated advice online. This emerging crisis highlights the urgent need for better digital safeguards, stronger regulations, and greater public awareness.
In a poll conducted by TSB involving 1,800 social media users, it was revealed that 42% of 16-24-year-olds and 37% of 25-34-year-olds have sought financial advice via social media within the past year. For those over 55, the figure dropped sharply to just 11%. Among the younger demographics, the trust in online financial advice is remarkably high — 70% of 25-34-year-olds and 62% of 16-24s said they believed the guidance they found. However, that trust is proving costly. Of the 31% who acted on this advice, a staggering 55% ended up losing money.
This trend is especially concerning in light of additional findings: over two-fifths of respondents said they felt worse about their financial standing after viewing wealth-centric posts. Among young people, this effect was even more pronounced, with 67% of 16-24s and 61% of 25-34s reporting negative impacts. Over half of the 25-34-year-old respondents said they felt compelled to invest or buy financial products after seeing such content.
The Financial Conduct Authority (FCA) is now cracking down on these practices. Last October, they interviewed 20 individuals under caution and flagged 38 problematic accounts. Nine others were prosecuted for promoting unauthorized trading schemes. TSB’s director of everyday banking, Surina Somal, urged the public to verify the credibility of financial content before acting on it. While there is some value to be found in social media’s financial corners, she emphasized the risks of unregulated and inaccurate advice.
Experts argue the issue goes beyond finance and into the realm of tech accountability. Silvija Krupena of RedCompass Labs calls it a “societal crisis” driven by platforms that profit from fraud but refuse to implement meaningful reforms. She compared the situation to the pandemic-era crackdown on health misinformation, criticizing tech giants for not showing similar urgency regarding financial scams. Meanwhile, Jonathan Frost of BioCatch warned that unless there is a joint effort among regulators, fintech companies, and social media firms, the cycle of harm will continue — potentially undermining trust in investing altogether.
What Undercode Say:
The Social Media Illusion: Finance Meets Virality
The line between entertainment and financial literacy has become dangerously blurred. Social media platforms are not designed to vet financial advice — they reward engagement, not accuracy. Algorithms push content that is flashy and emotionally charged, leading many users to overestimate the credibility of those dispensing financial guidance. When someone flaunts luxury lifestyles and claims it came from a few “smart investments,” it’s easy to see how younger users, often still learning the basics of financial planning, could be swayed.
Emotional Triggers and Peer Pressure
The psychological impact of constant exposure to “success” content creates a pressure cooker environment. Many young adults feel the need to keep up, to not be left behind financially. This leads them to take rash actions — like investing in schemes they barely understand — simply because someone charismatic on TikTok said it worked for them. The data TSB uncovered isn’t surprising; it’s a mirror of a deeper psychological and societal trend where financial decisions are driven more by peer validation than by rational analysis.
Why Trust Is Misplaced
Trusting a stranger’s financial advice based on a 30-second video or a filtered Instagram reel is inherently risky. The FCA’s actions, though commendable, come long after the damage is done. By the time a scammer is taken down, hundreds or thousands of users may have already fallen into the trap. These scams often exploit FOMO (fear of missing out) and urgency — both effective psychological levers that override cautious thinking. The illusion of easy money is perhaps the most enduring and dangerous myth on social media.
The Role of Platforms
Platforms like TikTok and Instagram are more than just passive channels; they’re active participants in the ecosystem of financial misinformation. Their ad revenue often depends on the virality of misleading or fraudulent content. Despite ample warning signs, these companies have been slow to act. Tech firms have shown they can act quickly — as they did with health misinformation during the COVID-19 pandemic — yet similar urgency is glaringly absent when it comes to financial scams.
Regulatory Gaps and Policy Lags
One of the biggest challenges in tackling finfluencer fraud is the pace at which regulation evolves. Social media changes faster than the laws that govern it. The FCA’s crackdown is a step in the right direction, but enforcement alone won’t be enough. There needs to be a broader, systemic framework where platforms are legally obliged to verify financial advertisers, and users are given transparent warnings when engaging with unregulated advice.
The Victim Mindset and Long-Term Impact
The damage from falling for a finfluencer’s advice is not just financial — it’s emotional and psychological. Victims may feel shame, embarrassment, and a lasting distrust of legitimate financial systems. This deters people from making smarter investments later on, even when well-informed opportunities arise. Worse, repeated losses can erode long-term economic stability for entire generations.
Banks Can’t Shoulder It Alone
While banks like TSB play a critical role in warning and reimbursing customers, the problem stretches beyond their domain. Without coordinated action from tech platforms, regulators, and even schools offering basic financial literacy, the next generation could be set up to fail. Education must begin early — not just about how to save or invest, but how to critically evaluate sources of financial information.
What Needs to Happen Now
This is a pivotal moment. The convergence of financial opportunity and digital disinformation is shaping how an entire generation builds wealth — or loses it. Policymakers must enforce the Online Safety Act, and social media companies must finally acknowledge their part in this crisis. The culture around money and digital content needs to shift from fast profits to long-term responsibility. Until that happens, young investors will continue to be easy targets.
🔍 Fact Checker Results
✅ Yes, over 55% of young people acting on finfluencer advice ended up losing money, as confirmed by TSB data
✅ The FCA has taken legal actions including 38 alerts and 9 prosecutions against unlicensed financial promoters
❌ Social media platforms have not yet implemented widespread verification systems for financial advisors
📊 Prediction
Social media-driven financial scams are set to rise further, especially as more Gen Z users enter the investing space with limited financial education. Unless platforms introduce mandatory verification for financial content creators and collaborate with regulatory bodies, we’ll likely see a spike in fraud cases by the end of 2025. This could lead to stricter global regulation of financial content online — potentially reshaping how money advice is distributed in the digital age. 📉📱💸
References:
Reported By: www.infosecurity-magazine.com
Extra Source Hub:
https://stackoverflow.com
Wikipedia
OpenAi & Undercode AI
Image Source:
Unsplash
Undercode AI DI v2
