How scammers use TikTok to scam viewers

Johannesburg – A recent phenomenon on the popular social media platform, TikTok, is causing concern that viewers – over 800-million users worldwide – mostly between the ages of 16 and 24, could be vulnerable to financial misinformation.

“Users should be weary of videos that are portraying lifestyles that seem too good to be true. Taking financial advice from online social platforms may have real and often devastating consequences on one’s finances, especially if you are starting on your financial journey, or learning to invest,” says Nomi Bodlani, the head of strategic markets at Allan Gray.

Bodlani adds that that financial advice should be tailored to one’s specific needs and circumstances. It is not a one-sizefits- all exercise. Under the hashtags “fintok”, “moneytok,” “financetok” or “howtoinvest” and “personalfinance”, there are millions of videos, some of which count their views in the billions.

In many cases, the people behind these videos are youngsters without any financial qualification, and some have a history of peddling promises of making money quickly.

Bodlani says this has opened the door for scammers and fraudsters to manipulate the emotions of users.

Bodlani lists top tips to scam-proof your investment approach and what to look out for when considering a new investment:

• An investment that requires you to recruit new investors in order to realise the return on your investment is a pyramid scheme.

• If you don’t understand how an investment product generates its returns, and there are no clear underlying assets, you should be cautious.

• Anything sold as a “once-in-a-lifetime opportunity” should be avoided.

• Consider financial service providers with decent track records. Most scams will promise great returns without a solid track record to back them up.

• If the investment is not registered with a mainstream financial body, like the Financial Sector Conduct Authority, it is not regulated.

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