79% Decide Investments Based on YouTube and TikTok
US SNS Financial Fraud Losses Reach 950 Billion Won
[Asia Economy Reporter Hyunwoo Lee] Increasing cases are emerging where young American MZ generation investors fall victim to financial scams after trusting only information from social networking services (SNS) like YouTube and TikTok. These individuals tend to trust and prefer SNS content over advice from family members or consultations with experts. As a result, financial scam damages exceeding approximately 950 billion KRW have been reported within the United States alone.
On the 26th (local time), the U.S. economic media Forbes reported that it commissioned an online survey company, Prolific, to conduct a survey from the 4th to the 6th of this month targeting 1,009 young Americans aged 18 to 41, representing the MZ generation, about where they receive investment information and financial advice. According to the survey results, 79% of all respondents decide on investments and receive financial advice through SNS platforms such as YouTube and TikTok, Forbes reported.
Those who decide on investments through family advice (35%), internet searches (33%), or expert consultations (11%) were significantly fewer compared to those relying on SNS. Among respondents, 47% received investment information via YouTube or Reddit, while others obtained information through TikTok (32%), Instagram (21%), Twitter (18%), Facebook (11%), and LinkedIn (7%).
Among the surveyed MZ generation, 69% receive investment information or financial advice via SNS at least once a week, and 57% of these individuals gather information related to stock and bond investments. Additionally, some inquire about ways to get rich quickly (11%) or debt management methods (7%).
Notably, the SNS platform most trusted by the American MZ generation for investment information is Reddit, with 37% of respondents expressing trust, followed by YouTube (34%), TikTok (14%), LinkedIn (7%), Twitter (4%), and Instagram (3%). Only 31% of respondents said they verify the career or expertise of the person posting investment information on SNS.
Excessive trust in investment information posted on SNS leads to financial scam damages. According to the U.S. Federal Trade Commission (FTC), in 2021, 95,000 victims of financial scams related to SNS investment information were recorded in the U.S., with damages amounting to $770 million USD (approximately 950 billion KRW). This accounts for 25% of the total scam damages nationwide. The FTC warned that "SNS is a goldmine for scammers," cautioning about the risks of investing.
Experts warn that investment information posted on SNS is published without any regulation or censorship, so investors must exercise great caution. Rick Nutt, Chief Asset Advisor at financial consulting firm LourdMurray, told Forbes, "Even if the information is incorrect or inaccurate, anyone can post on SNS without any regulation," adding, "Information circulating online is difficult to trust and hard to filter."
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