Sketchy ads on TikTok encourage high-interest payday loans
A group of secret TikTok advertisers are using sketchy tactics to push massive loans that experts say could violate misleading advertising laws, The Post has learned.
Some of the ads tease “almost instant” five-figure deposits despite bad credit, while others seem to imply that they are part of government “inflation programs” and use the logos of news organizations like CNN.
Cash-strapped borrowers who click on links in many advertisements are asked to provide sensitive personal information, including their social security and bank account numbers.
“At best, these videos are designed to make you give up information you shouldn’t be giving away, which will lead to more solicitations,” John Breyault, vice president of the National Consumer League advocacy group, told The Post. “At worst, this is a complete scam designed either to take your money or information for fraudulent purposes.”
A typical TikTok loan ad opens with a photo of the words “US Government Inflation Program 2022” on a video from the US Capitol.
“The US government’s inflation program helps Americans get a loan, even with bad credit,” a voiceover says in somewhat broken English. “You can get up to $50,000 by filling out a simple form.”
The ad then cuts to a shot from the point of view of a person holding stacks of hundred dollar bills in a car.
“I use my money to cover my bills, fill up on gas for the rest of the year, and cover my medical needs,” the voiceover says. “Click the link below, fill out the form in as little as 60 seconds and see how much you can get. Thank me later.”
People who click on the link, which leads to a site called “Lavish Finances”, are asked to fill out forms with personal information, including bank details, social security numbers and addresses.
Lavish Finance says it then passes applicants’ information to lenders, who can respond with loan offers with annual interest rates of up to 35.99% for terms of up to four years. If someone were to take out a loan under the sites’ maximum terms – $50,000 repaid at 35.99% APR over four years – the user would ultimately be liable for more than $137,000.
Breyald said the loans advertised by Lavish Finance and similar sites are “terrible” for the vast majority of consumers.
“35.99% APR is higher than some of the highest credit card loans,” he said.
Breyault and Bartlett Naylor, a financial policy advocate with consumer rights group Public Citizen, said the ads risked violating Federal Trade Commission rules on misleading advertising.
“If it is implied that it is a government program and you click on it and it is not a government program, my advice is: you are being scammed,” Naylor said, advising people to “stay away” and calling on TikTok to take a tougher line against people. loan announcements.
After The Post contacted TikTok to comment on the ads from Lavish Finances and other companies, the social media site removed them over violations of its advertising policies, which prohibit “misleading, inauthentic and deceptive behavior”.
“Advertisers and ad content must follow our Community Guidelines, Advertising Guidelines, and Terms of Service, and content that violates these guidelines will be removed,” a TikTok spokesperson told The Post.
When The Post emailed the only email address available on the Lavish Finances website for comment, messages bounced back. A phone number listed on the site went directly to a voicemail, which was full. The Lavish Finances site lists the address of a building in Dover, Del., which sells “virtual office services” for $50 a month.
The FTC said it does not comment “if it is investigating a specific company, individual, or business practice.” The agency has not announced any action against any of the sites mentioned in this article, but it frequently prosecutes companies that the agency believes falsely claim to be affiliated with the US government.
Lavish Finances is far from the only advertiser to use questionable techniques on TikTok. An ad that links to a site called PersonalLoanPro shows what appears to be a fake CNN segment. It flashes “BREAKING NEWS” that “AMERICANS CAN NOW CLAIM UP TO $50,000”.
“They’re showing it again,” a man says, pointing to a television showing the segment. “That’s how I got my money.”
The camera then pans to the man’s face as he says: ‘A new benefit was just released last week allowing Americans to claim up to $50,000. You don’t need a credit history at all — no bank requirements. I did it myself and made $8,000 in two days.
A similar Facebook version of the video was slapped with a ‘false information’ warning in May – but as of mid-June it was still being advertised on TikTok without any disclosure.
Other advertisements related to PersonalLoanPro feature various narrators gushing about receiving money through the site. In one, the text “I got $45,000 almost instantly” appears onscreen as a female narrator walks up to a man and says, “Baby, where did you get all that money ? »
The man shows an online bank account on his phone and says, “That’s really crazy. I just got a $45,000 loan and it’s already in our bank account.
In another ad, a male narrator sitting in a car brandishes wads of hundred-dollar bills and raves that a loan is the “last-minute miracle I desperately needed.”
Like Lavish Finance, PersonalLoanPro asks people to enter sensitive information, including their social security numbers. He says he will then refer them to lenders who can offer them loans with interest rates of up to 35.99% APR on terms of up to 15 years.
“They basically say something like, ‘Nobody else knows, I wish I knew sooner’ — and they show you stacks of cash,” Breyault said. “It’s laughable at first glance, but it’s a common tactic.”
PersonalLoanPro’s site says it’s owned by a Durango, Colorado-based company called On The Barrelhead. Email inquiries sent to both PersonalLoanPro and On The Barrelhead went unanswered, while a call to an On The Barrelhead site phone number went straight to voicemail.