People who take financial advice from social media influencers are at risk of losing their money

Posted at 9:38 PM, Sep 21, 2022
and last updated 2022-09-21 22:38:40-04

CORPUS CHRISTI, Texas — A new report shows more and more Texans are taking financial advice from social media influencers. Experts warn young viewers are especially vulnerable to lose their money.

FinTok, a financial space on Tik Tok has grown in popularity.

#FinTok has gained more than 1.6 billion views overall and #PersonalFinance is sitting at over 6.4 billion views.

As more people become interested in learning, scammers are out to take what money they can get.

"People can tell you on Tik Tok to invest in something and you'll become a millionaire in two years,” said TAMUCC student, Liv Moya.

Steven Bear echoes Moya’s experience.

"I do see a lot of investment advice from people my age,” Moya said.

Bear is a junior at the TAMU-CC University. He tells KZTV that he made his first investment in 2020.

"I had a summer job and then I had my hours cut short,” said Bear. “I had to find a way to make some money.”

Bear navigated making important financial decisions on his own. First, investing in a startup company and now cryptocurrency.

"Stocks are generally backed by companies that have proof that they're legitimate. A lot of cryptocurrencies in the cryptocurrency space comes off as scammy,” explained Bear.

The Better Business Bureau has responded to several reports of Tik Tok scams.

Scammers will pose as an investor, promising to turn a few hundred dollars’ worth of cryptocurrency into thousands in no time at all, a service they ask you to pay for.

They'll ask you to send money through a digital wallet service. Usually, it’s a few hundred dollars to start.

When you try to get your money back, the scammer will claim you need to pay fees.

When it comes to financial advice, Bear said he stays away from Tik Tok.

"Don't throw your money into what they say because you don't want to put all your money in one place,” said Bear.

Here are ways to avoid money flipping scams 

  • Use good judgment. Get-rich-quick schemes and investments that are guaranteed to give you a huge return are nearly always scams. If an offer sounds too good to be true, it probably is.
  • Do your research. Before you contact someone through TikTok or another social media platform, look up their name, phone number, and company name (if they have one) online. If they have conned others, you’ll likely find complaints online about it.
  • Don’t give into scare tactics. If an “investor” contacts you, they may try to convince you the investment will only work if you act right now. Or, if you’ve already sent them funds, they may threaten you with legal action if you don’t pay their fees. In any case, don’t give in to scare tactics. Recognize them as the hallmarks of a scam.
  • Understand how digital wallet services work. Treat any money you send through a digital wallet service like cash. Once you send the money, there will be little you can do to get it back if it turns out you were scammed. It’s best to use these apps only with people you know and trust.