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One of the biggest problems facing social media platforms today is the deluge of product pitches for miracle health cures, amazing new fad diets, get-rich-quick schemes, and just plain flat-out scams involving fake or counterfeit goods designed to separate you from your wallet. Recognizing this, the Federal Trade Commission (FTC) has now announced that it is looking to crack down on all these fraudulent product pitches on social media.
It’s time to end all the fraudulent product pitches on social media
In March, the FTC sent 6(b) orders to eight different social media companies and platforms, including Meta (parent company of Facebook and Instagram), TikTok, YouTube, Twitter, Pinterest, Snap, Pinterest, and Twitch. The FTC is seeking more details on how they accept ads on their platforms, what steps they take to weed out fraudulent product pitches, and how they label advertising content appearing on the platform.
While the FTC says the information is going to be used to come up with more effective rules and oversight provisions, we all know what the real subtext is here: these money-grubbing social media platforms have been accepting ads from just about anyone these days, all with the goal of making as much money as possible. In the process, they haven’t even stopped to consider what impact all those fraudulent ads might be having on consumers.
According to the FTC’s Bureau of Consumer Protection, every year consumers lose $1.2 billion as a result of fraudulent social media pitches. As the FTC points out, “Social media has been a gold mine for scammers.” With a minimal vetting process, and options to seek out specific demographic groups for their ads, social media is just about the best place to run their scams.
What’s particularly shameworthy, says the FTC, is that many of these ads seem to target people who are especially vulnerable. The FTC noted that frauds surrounding substance abuse are particularly prevalent, as are frauds for down-on-their-luck people looking for a new source of income. As a result, the FTC will focus on cracking down on frauds related to health disorders and too-good-to-be-true income opportunities.
What will change?
Right now, we don’t know exactly what the FTC will conclude after viewing all the data. It might decide to enact new rules for text-based social media platforms and different rules for video-based social media platforms. But one thing is certain: there needs to be greater clarification online about what is social media content, and what is a social media ad. Sometimes, the line between the two blurs so much that it is almost impossible to make the distinction. Is the latest video on YouTube uploaded by your favorite influencer real, or is it just a shameless product plug? Every influencer claims to “love” the products they endorse, but it’s easy to see that many of them are just doing it for the paycheck.
This is not to say that these influencers are anywhere as reprehensible as the scammers the FTC is going after, but you have to admit, sometimes some of those products being pushed online seem really scammy. Moreover, it is important to note that the FTC is not saying that any wrongdoing has taken place. It’s really more of a fact-finding mission, designed to understand all the loopholes being exploited by scammers. The purpose of a 6(b) order is to inform future enforcement action.
That being said, it will be a welcome relief if we start to see a scaling back of all the fraudulent products being promoted on social media today. Back in the day, it was easy to recognize the snake oil salesman promising some miracle cure. Not so much today, where social media content often seems like one, scrolling advertisement after another.