Tiktok has launched a new crackdown on the advertisement of financial services on its platform. This is after months of warnings from experts and even the UK’s Financial Conduct Authority (FCA).
Influencers and TikTok stars have been no strangers to controversy in the financial arena. With different cryptocurrencies, altcoins, and stocks taking over the internet, a number of influencers have jumped at the chance to promote them and make a few bucks.
Popular YouTuber Logan Paul was allegedly exposed in a cryptocurrency “scam.” This was because he began pushing the new ‘Dink Doink’ token to his audience but it was later revealed he reportedly had a hand in creating it.
Now, TikTok is moving to make a change, cracking down on the adverts for financial services on the video-sharing platforms.
The move, first reported in the Daily Mail, will have far-reaching effects. Companies such as Monzo and Revolut could be affected, along with get-rich-quick schemes, savings apps, and cryptocurrencies.
However, its advertisement policy remains the same. This is because the new policy targets content creators who have been paid a fee to promote products like credit cards, pay later schemes like Klarna, trading platforms, and so on.
Advertisements by financial service companies will also only be able to advertise to those over the age of 18. Adverts by pyramid schemes, crypto, and virtual currencies are already prohibited.
What will the new TikTok financial regulations affect?
Up until now, banks and financial companies have realized there are many benefits of teaming up with influencers. In recent months, TikTok has become an increasingly popular source for many looking for financial advice.
Influencers have offered helpful advice on how to save money, navigate financial markets, and advice on what to look for in terms of loans and credit cards.
Yet, there are many who have used TikTok’s previously loose regulations to influence and mislead young investors for personal gain as Financial TikTok or “Fintok” and #StockTok as a TikTok genre has grown significantly in recent months.
This mass proliferation of content has resulted in myths and terrible financial advice going viral on the platform. These have ranged from setting up companies to avoid paying taxes to secret million-dollar bank accounts to risky options trading.
TikTok, of course, isn’t the only social media platform to cause disruption to financial markets and stocks. Earlier in the year, a Reddit thread famously resulted in massive inflation of the stock price of GameStop.
Some influencers have criticized those who have sought to cash in with popular Twitch streamer Mizkif even branding them scummy.Influencers have promoted everything from altcoins to stocks.
How will this affect #FinTok and #StockTok?
Speaking to the Daily Mail, Molly Mackay, founder, and chief executive of Boring Money said: “The sole incentive for unqualified influencers to talk about financial products has been making money.
With that removed, it still leaves the road open for those who want to help and inform, but are agnostic about which products people end up choosing. In practice, most of the big brands are still struggling to get their heads around Twitter, let alone work out TikTok.”
Mackay believes the changes should “clean up” those video makers who were promoting “dangerous rubbish” for their own gain. Though, we’ll have to wait and see if it really ends the likes of #FinTok.