People who use social media have been issued a warning as some of the ads that they see may be "misleading and potentially fraudulent". The consumer experts at Which? found ads on both Facebook and Instagram which appear to provide misleading financial guidance.
Working with Demos Consulting, Which? found many risky investment adverts on the two platforms, which are part of the Meta parent company. Their research used human and automated analysis to find the potentially dodgy adverts.
It involved searching for risk factors such as the ad not including a risk warning or promising sensational, life-changing returns. Which? and Demos consulting came across adverts focused on a piece of software called 'Tesler' and there were multiple indications that they were probably scams.
Of the 20 adverts for Tesler identified by the research, each raised eight separate serious risk flags. The use of the name ‘Tesler’, with its similarities to automotive brand ‘Tesla’, and other language used may be reinforcing this potentially misleading reference to attempt to draw in victims.
When a Which? researcher clicked on a Tesler ad, they were prompted to enter their contact details. Within less than an hour, they were called by a representative and pressured to set up a trading account amid claims that its “sophisticated algorithm…plays the trade with an 87 percent success rate”.
The Financial Conduct Authority has previously issued a warning about a scam investment company using the brand name ‘Tesler’ and impersonating a regulated trading company based in the UK - although it has not been confirmed that these are the same companies. Consumers lose more than £45,000 on average to ‘clone’ firm investment scams according to Action Fraud.
Outside of the Tesler ads Which? also found a small number of adverts for binary options, a form of trading banned in the UK in 2019. The FCA has previously warned that any firm offering binary options services is probably unauthorised or a scam.
The consumer champion’s manual analysis identified 89 adverts with three or more red flags, such as a no risk warning or a claim that returns are guaranteed, amongst others, of which 23 had five or more red flags.
Which? is calling on social media platforms to improve their algorithms to reduce the risk of misleading advertising. However, they add that algorithms are not perfect so human review and due diligence are needed too
Rocio Concha, Which? Director of Policy and Advocacy, said: "It is extremely worrying that misleading and potentially fraudulent investment adverts are still being shown to Facebook and Instagram users, putting consumers at risk of immense financial and emotional harm.
"If a consumer group and another charity can design algorithms and uncover these adverts then tech giants should be able to create effective systems to do the same job on a bigger scale.
"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. Otherwise we could be waiting even longer for alternative action to tackle online fraud infiltrating the world’s biggest search engines and social media sites."
Which? chose to investigate Meta because it is more transparent than other online platforms about the advertising present on its platforms, having taken steps to publish all adverts displayed on Meta platforms.
Meta told the consumer experts that it does not allow fraudulent activity on its platforms and that it works closely with law enforcement to support investigations and keep scammers off its platforms.
A Meta spokesperson said: "We removed a number of the ads brought to our attention for breaking our rules, many of which 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."
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