Over Half of “Finfluencer” Victims Have Lost Money, Says TSB – Source: www.infosecurity-magazine.com

A growing number of young people are losing money after acting on the advice of unregulated “finfluencers” they follow on social media, a UK high street bank has warned.

TSB polled around 1800 people who use social media, to better understand the scale of the problem.

It revealed that over two-fifths (42%) of 16-24-year-olds and 37% of 25-34-year-olds have used social media to access financial advice in the past 12 months. The figure falls to 11% for the over-55s.

Of these groups, over half (53%) claimed to have trusted the content – rising to 70% of 25-34-year-olds and 62% of 16-24s. 

However, of the 31% that acted on the advice they accessed on social media, 55% lost money, warned TSB.

Read more on financial scams: European Police Bust €3m Investment Fraud Ring

The UK’s Financial Conduct Authority (FCA) has previously warned of the challenge posed by finfluencers, who are often trusted by young people attracted by the lifestyles they flaunt.

In fact, over two-fifths (43%) of respondents polled by TSB said they felt worse about their finances after seeing posts about wealth on social media, rising to 67% of 16-24-year-olds and 61% of 25-34s. Over half (53%) of 25-34-year-olds said they felt compelled to take out a product, or invest, as a result.

That’s why the FCA is cracking down on finfluencers, interviewing 20 under caution last October, and issuing 38 alerts against related social media accounts. Last year, it also took action against nine individuals for promoting an unauthorized trading scheme.

“While there could be useful sources of financial advice on social media platforms, there are also pitfalls through incorrect information and unregulated investments that could derail your finances,” said TSB director of everyday banking, Surina Somal.

“While it’s great that so many people are clearly seeking out financial advice, it’s important that you verify the content first to ensure you’re making safe and informed choices for your financial life ahead.”

Time for Social Media Companies to Step Up

Silvija Krupena, director of the Financial Intelligence Unit at RedCompass Labs, argued that this isn’t a banking issue but a “tech and societal crisis driven by platforms that profit from fraud but resist meaningful reform.”

She called for more pervasive scam warnings, better end-user education and verified financial advertisers on social media platforms.

“During the pandemic, tech firms acted fast to label health misinformation. But with scams causing life-changing financial losses, we’ve seen no such urgency,” Krupena added.

“These scams are often so convincing that victims ignore even direct warnings from their bank apps as they go to send money. Social media companies aren’t just bystanders; they’re enabling fraud and profiting from advertising. It’s time they took real responsibility.”

Investment fraud is now the biggest earner for scammers, and generates more losses for victims than any other cybercrime type – over $6.5bn in 2024, according to the FBI.

Jonathan Frost, director of global advisory for EMEA at BioCatch, said TSB’s findings should spur the government to urgently enforce the Online Safety Act, which requires social media platforms protect users from harmful and illegal content.

“The responsibility for fraud should not solely lie with banks to protect and reimburse consumers. Regulators, fintechs and social media must collaborate to root out such unauthorized financial advice and fraudulent schemes at their source,” he argued.

“Otherwise, misleading investments from finfluencers can cause lasting financial and emotional damage to consumers, damaging confidence in investing to the detriment of the UK’s economy.”