As the United States economy worsening, several TikTok advertisers are using the platform for their questionable tactics to entice viewers into availing of massive loans.
However, experts stated that the loans advertised on TikTok could fall under deceptive advertising and can be punishable by law.
TikTok’s Sketchy Loan Ads
According to New York Post, some ads tease five-figure deposits and instant approval despite a person’s bad credit.
Other ads imply that they are connected to the government as part of an inflation program and will even use logos of credible news organizations.
Viewers looking for fast cash would be asked for their personal information when they click on the links, including their Social Security number and bank account numbers.
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In an interview with New York Post, John Breyault, the vice president of the National Consumer League, said that the ad videos on TikTok are designed to make viewers give up their personal information, which will result in more solicitations.
Breyault added that the worst-case scenario is that a view falls for a scam that is designed to take their money or steal their identity.
Fake Inflation Programs on TikTok
One typical lending ad on the platform opens with a message that says “US Government Inflation Program 2022” 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 a bad credit, and that they can get up to $500.00 by filling out a form, according to National World News .
Viewers clicking the link will be asked to type in their personal information, including their full name, complete 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 Finances will notify them that their information is forwarded to lends, who can respond with loan offers with annual interest rates of up to 35.99% over a four-year term.
Once an applicant takes out a loan under the website’s maximum terms, like $50,000 paid back at 35.99% APR over four years, they need to pay back more than $137,000.
Breyald stated that the loans being advertised by the website and other loan sites are not there to help the consumers but to trick them. He added that the 35.99% APR is a lot higher compared to the highest credit card loans that are approved by the bank.
Barlett Naylor, a financial policy advocate, said that the ads in TikTok videos violate the Federal Trade Commission rules on deceptive advertising.
Naylor stated that viewers need to be vigilant in clicking links, especially if the ads imply that it is from a government program because there is a massive possibility that it is a scam. He added that people should stay away from TikTok ads altogether.
The New York Post reported that TikTok has taken down some of the videos for violating the platform’s policies, banning deceptive and misleading behaviors.
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Written by Sophie Webster
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