As the US economy deteriorates, several TikTok advertisers are using the platform for their dodgy tactics to lure viewers into massive loans.
However, experts said loans advertised on TikTok could fall under misleading advertising and be punishable by law.
TikTok sketchy loan ads
According to the New York Post, some ads tease five-figure deposits and instant approval despite a person’s bad credit.
Other ads imply that they are tied to the government as part of an inflation program and will even use the logos of credible news organizations.
Viewers looking for a quick buck would be asked for their personal information when they clicked on the links, including their social security number and bank account numbers.
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In an interview with the New York Post, John Breyault, the vice president of the National Consumer League, said video ads on TikTok are designed to trick viewers into giving up their personal information, which will lead to more solicitations.
Breyault added that the worst-case scenario is for a view to fall for a scam designed to take their money or steal their identity.
Fake inflation programs on TikTok
A typical loan ad on the platform opens with a message that reads “2022 US Government Inflation Schedule” over a video showing the US Capitol.
A voiceover in broken English will say that the “program” is set up to help Americans get a loan, even if they have bad credit, and that they can get up to $500,000 by filling out a form, according to National World News.
Viewers clicking the link will be asked to enter their personal information, including full name, full address, full bank details, and social security numbers. The link often leads to a website called “Lavish Finances”.
If a viewer completes the form, Lavish Finance will inform them that their information is passed on to lenders, who can respond with loan offers with annual interest rates of up to 35.99% over a four-year term.
Once an applicant has taken out a loan under the website’s maximum terms, such as $50,000 repaid at 35.99% APR over four years, they must repay over $137,000.
Breyald said the loans advertised by the website and other lending sites are not there to help consumers but to mislead them. He added that the APR of 35.99% is much higher than the highest bank-approved credit card loans.
Barlett Naylor, a financial policy advocate, said ads in TikTok videos violate Federal Trade Commission rules on misleading advertising.
Naylor said viewers should be careful when clicking on links, especially if the ads imply they are from a government program, as there is a huge possibility that it is a scam. He added that people should stay away from TikTok ads.
The New York Post reported that TikTok took down some of the videos for violating the platform’s advertising policies, prohibiting misleading and misleading behavior.
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Written by Sophie Webster
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