TikTok has officially banned users from promoting financial products and services including cryptocurrency, and has additionally issued a ban on advertisements for cryptocurrency products and exchanges.
In an update to the company’s Branded Content Policy over the weekend, all financial services and products have been added to the banned list.
“All financial services and products are prohibited, including but not limited to lending and management of money assets, loans and credit cards, buy now pay later (BNPL) services, trading platforms, cryptocurrency, foreign exchange, debit and pre-payment cards, forex trading, commemorative coins, pyramid schemes (including non-financial services),investment services, credit repair services, bail bonds, debt assistance programmes, get rich quick schemes, debt consolidation services and penny auctions,” the policy now reads.
Interestingly the policy also bans advertisements for buy now, pay later companies, which have already landed themselves in hot water in the UK for influencer partnerships.
Financial products and services now join the laundry list of products that cannot be flogged as sponcon on the platform including alcohol, contraceptive products, vitamins, sexual products and animals among a number of other things.
The news comes after TikTok has come under fire in recent months for allowing users to post unsolicited and unregulated financial advice, which is particularly risky given the volatility of the cryptocurrency market.
According to a report by the UK’s Financial Conduct Authority (FCA), the financial side of TikTok – aptly named FinTok – has targeted young and ill informed investors looking to make a quick profit.
“The findings reveal there is a new, younger, more diverse group of consumers getting involved in higher-risk investments, potentially prompted in part by the accessibility offered by new investment apps,” the FCA report states.
Meanwhile, the Morrison Government has repeatedly rejected calls to regulate financial influencers on social media – primarily TikTok – in recent months, with Financial Services Minister Jane Hume going so far as to compare these influencers to taxi drivers giving stock tips.
“We have to back Australians to be sensible enough to judge for themselves whether to put their hard earned money into higher-risk assets,” Hume told a conference of the Stockbrokers and Financial Advisers Association back in May.
“Some of the information and opinions that consumers receive from online forums will be bad but some of it will be good, and a lot of it will better engage younger generations in investment and financial markets.”
Essentially, Australia’s solution has been to simply ignore the problem and assert that these TikTok influencers – some with followers in the millions – are not giving “financial advice.”
However, the Australian Securities And Investments Commission is now trying to crack down on finfluencers who offer unlicensed financial advice.
Regardless of how the situation in Australia plays out, finfluencers will no longer be able to hurl unsolicited financial advice on TikTok.