Social media brands ‘exposing’ users to fraud, claims report
The fashion industry and anti-counterfeiting groups are urging consumers to be aware of the growing threat of false advertising online.
A new report, published yesterday, July 22, by the Transnational Alliance to Combat Illicit Trade (TRACIT), claims that fraudulent advertising is “everywhere online”, and that the problem is getting worse.
The study, published jointly with the American Apparel and Footwear Association (AAFA), says social media platforms like Instagram and Facebook are notable breeding grounds for false advertising.
This includes advertisements which redirect to fraudulent e-commerce sites selling counterfeit goods. According to the report, more than 70 consumer and apparel companies confirmed they had been targeted by fraudulent and infringing sponsored adverts on Instagram and Facebook since May 2017.
“The actual number is likely to be significantly higher, as these advertisers target brands indiscriminately across multiple sectors,” the report said.
“It’s alarming that people are exposed to fraudulent advertisements for counterfeits while they’re thumbing through their social media accounts,” said TRACIT director general Jeffrey Hardy.
He added: “The ads are so professional that they easily deceive consumers into thinking they’re getting a great deal. Instead, they’re being diverted to a rogue website that was built specifically to sell and distribute counterfeits—and they’re just not expecting that.
Hardy pointed the finger at social media companies themselves for allowing the infringing advertisements to be displayed on their platforms.
“It’s absolutely inconsistent with today’s standards of corporate social responsibility to expose users to such easy forms of fraud,” said the TRACIT director general. “Chasing fraud once it’s loose on the internet is not effective and leaving legitimate companies to clean up the mess is unfair and unreasonable.”
The report calls for a “rigorous” review of all advertisements before they are approved for publication online, both manually and with algorithms.
Platforms should also establish strong deterrents and enforcement procedures against parties found to have posted infringing or fraudulent adverts, the report said.
It also calls for the introduction of an “e-licence” for online advertisers, to prove they are legitimate businesses. This would only be awarded after a verification process, including the review of bank statements and physical location information.
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