Fifth of investment adverts on Facebook are misleading, Which? Finds


A fifth of investment adverts on social media sites Facebook and Instagram have been accused of being misleading and risk costing savers thousands of pounds.

An investigation by consumer rights group Which? found unregulated firms and suspected scammers are targeting investors on sites such as Facebook and Instagram, despite years of campaigning for stricter controls on social media.

Hundreds of investment adverts, both regulated and unregulated, were found on the Meta platform, which owns Facebook and Instagram, between October last year and August 2022. The investigation, carried out Which? and Demos Consulting, found a quarter were linked to property investment and a fifth advertised cryptocurrencies.

Of the 484 investment adverts analysed, almost a fifth had three or more “red flags” – these included not including a risk warning to consumers that they could lose money and false claims that unrealistic returns were guaranteed.

Misleading adverts often promise large and “risk free” returns, using high pressure tactics to target victims. The young and vulnerable with money worries are especially at risk as they chase higher returns to weather the cost of living crisis.

The City watchdog, the Financial Conduct Authority, requires its regulated firms to clearly include appropriate warnings in any investment adverts – any unregulated firms promoting investments must first get approval from a firm under its rules. But the FCA has limited powers to remove posts from unregulated firms on social media sites.

Rocio Concha, of Which?, warned it was extremely worrying that misleading and potentially fraudulent investment adverts were still being shown on Facebook and Instagram.

Ms Concha said: “If we can uncover these adverts then tech giants should be able to create effective systems to do the same job on a bigger scale. These adverts are putting consumers at risk of immense financial and emotional harm.”

A spokesman for Meta said it had removed a number of the adverts found to be misleading during the investigation.

The firm added: “Many of these 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.”

Meta told The Telegraph it did not allow fraudulent activity on its platforms, but said enforcement could never be perfect.

The Online Safety Bill, the Government’s flagship legislation on internet safety, returned to Parliament this week after months of delay. It is expected to include a new legal duty requiring social media giants to block scammers paying to advertise on their platforms.

Ms Concha added: “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.”

A spokesman for the FCA said: “Tech companies have a vital role to play in protecting consumers from online harm.

“We want to see continued and concerted efforts by all organisations with an interest in protecting consumers to achieve a sustained reduction in scams.”

Investment fraud was the fastest growing scam recorded by the Financial Ombudsman Service between April and June this year, accounting for almost a third of its fraud complaints – compared with a fifth in the same period last year.

The service warned of a spike in savers losing hundreds of thousands of pounds each, some to sophisticated criminals operating cloned websites of legitimate investment firms.