A banking expert has warned Brits about a rise in an online mistake that is costing people hundreds of pounds. New data reveals that more than half of the people who acted on financial advice they saw on social media in the past year lost money as a result.
More than half lose money
Josie Clapham, the chief customer officer at TSB, is urging Brits to be mindful when following social media financial advice. The statistics show that 32% of people have acted on advice they read online, with 56% losing money, averaging £700 each. Ms Clapham has warned that acting on "unverified and misleading content" can come at a "real cost".
"And it's not just about losing money," she added. "Almost six in 10 (59%) of those who acted on financial advice they saw on social media regretted doing so. While there is clearly some good content out there, it really shows the important of verifying content and advice with trusted, official sources, before you act."
Risks of scams and AI
The expert reiterated that it's "vital" not to act on unverified advice when making decisions on mortgages, investments and savings. She urges people not to rely on social media but to verify the information with a trusted source, such as their bank, broker, or adviser.
Ms Clapham also noted the risk of "get rich quick" claims or investment opportunities that appear online. She said they can sometimes turn out to be a scam. "In the worst cases, what looks like an investment opportunity online can turn out to be a scam," she explained. "UK Finance figures show that people lose more than £3,000 on average per case to investment fraud."
As well as social media, an increasing number of Brits are using AI to learn more about financial topics. The data show that 25% of people have used AI for advice, rising to 43% among 25 to 34 year olds. Ms Clapham said: "Unfortunately, fraudsters can easily create AI-generated content not only to mislead you, but to encourage you to share personal information, invest or transfer money – potentially leaving you out of pocket; so tread carefully and check against trusted sources before acting on the content you’re seeing online."
Psychological impact and checking advice
Social media content can have a psychological impact on your relationship with money. Almost half (49%) of people surveyed said financial content had made them feel pressured to improve their finances, while a third (33%) had considered changing their financial goals or career aspirations because of content they had seen online.
Above all, Ms Clapham said it is crucial to "always check before you act". She added that people should also make sure what they've seen is "trustworthy" and can be "verified". The expert explained: "Your bank’s website, local branch or video banking can be useful places to find reliable information and receive advice on a range of financial issues."
"And if you’re struggling with your finances, remember there are trusted places you can turn to for help. Speak to your bank or organisations such as StepChange or Citizens Advice who can offer support and guidance."
