TikTok added financial products and services, including cryptos and pyramid schemes, to its list of prohibited content.
According to the Financial Times, the decision comes after users were cautioned against receiving financial advice via TikTok videos due to concerns that it could be misleading especially for younger savers.
TikTok’s ‘branded Content Policy’ page lists financial services and products as being added to its list of “globally prohibited industries”.
This section covers lending and managing money assets, loans, credit cards, buy-now pay later services and trading platforms. It also includes cryptocurrency, foreign currency, debit and prepayment cards, forex trading, and pyramid schemes.
Anthony Morrow, cofounder of OpenMoney, said that the real proof of TikTok’s commitment to clean up its act will be in the way it enforces this policy to ensure that prohibited content is quickly identified.
“We know that social media influencers fuel demand for day trading, unregulated investments like cryptocurrency by extolling the potential returns and ignoring the huge risks involved.
Morrow stated that TikTok posts, including #bitcoin, have been viewed 4.4 billion times. #cryptocurrency, #investment 790 millions, and #stockstobuy 447,000,000 has received 1.5 billion views.
He stressed the importance to seek advice from someone who is “properly qualified to discuss the options”, as well as making sure that you understand and feel comfortable about the risk you are taking.
TikTok and Citizens Advice UK teamed up last month to produce videos about how to understand financial terminology and make informed financial decisions.
The Financial Conduct Authority (UK) stated earlier this year that young people are engaging in higher-risk investments. This could be prompted by the accessibility of new investment apps.
It stated that there was evidence that higher-risk products might not be appropriate for all consumers. Nearly two thirds of respondents (59%) claimed that an investment loss would have a profound impact on their lifestyles.