TIKTOK AD ‘SCAM’
Spots hawking ‘big money, bad credit’ raise concern
A group of secretive TikTok advertisers is using sketchy tactics to push massive loans that experts say could run afoul of deceptive advertising laws, The Post has learned.
Some of the ads tease “almost instant” five-figure deposits despite bad credit, while others appear to imply 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 of the ads are asked for sensitive personal information, including their Social Security and bank account numbers.
“At best, these videos are designed to make you give up information that you shouldn’t that will result in more solicitations,” John Breyault, vice president of the National Consumer League, told The Post. “At worst, this is a complete scam designed either to take your money or information for fraudulent purposes.”
One typical TikTok lending ad opens with a shot of the words “US Government Inflation Program 2022” over a video of the US Capitol.
“US government inflation program helps Americans get a loan, even with bad credit,” a voice-over says in somewhat broken English. “You can get up to $50,000 just filling simple form.”
The ad then cuts to a shot from the perspective of a person holding stacks of $100 bills in a car.
“I’m using my money to cover my bills, get some gas for the rest of the year and cover my medical needs,” the voice-over says. “Click the link below, fill the form in as little as 60 seconds and see how much you can get. Thank me later.”
People who click the link, which leads to a site called Lavish Finances, are asked to fill out forms with personal information, including bank account details, Social Security numbers and addresses.
Huge interest rates
Lavish Finances says it then forwards applicants’ information to lenders, who can respond with loan offers charging annual interest rates of up to 35.99% over terms of up to four years.
If people were to take out a loan under the site’s maximum terms — $50,000 paid back at a 35.99% annual percentage rate, or APR, over four years — they would ultimately be on the hook for more than $137,000.
Breyault said the loans advertised by Lavish Finances and similar sites are “terrible” for the vast majority of consumers, adding that a “35.99% APR is higher than some of the highest credit card loans out there.”
Both Breyault and Bartlett Naylor, a financial policy advocate with Public Citizen, said the ads risk violating Federal Trade Commission deceptive-ad rules.
“If it’s implied it’s a government program and you click on and it’s not a government program, my advice is: You’re being scammed,” Naylor said, advising people to “stay away” and calling on TikTok to take a harder line against personal-loan ads.
After The Post contacted TikTok for comment on ads from Lavish Finances and other companies, TikTok took them down due to violations of its advertising policies, which ban “misleading, inauthentic and deceptive behaviors.”
“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 rep told The Post.
When The Post emailed the only available address on the Lavish Finances website for comment, the messages bounced back. A phone number listed on the site went straight to a voicemail box, which was full. The Lavish Finances site lists an address for a building in Dover, Del., that sells “virtual office services” for $50 per month.
The FTC said it does not comment on “whether it is investigating any specific company, individual, or business practice.”
Questionable ads
Lavish Finances is far from the only advertiser to use dubious 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” and says “AMERICANS CAN NOW CLAIM UP TO $50,000.”
The camera then flips around to a man’s face as he says, “A new benefit just got released last week, allowing Americans to claim up to $50,000. You don’t need any credit history at all — no bank requirements. I did it myself and I got $8,000 in two days.”
A similar Facebook version was slapped with a “False Information” warning in May — but as of midJune, it was still being shown on TikTok without any disclosure.
Other ads that link to PersonalLoanPro feature various narrators gushing about receiving cash through the site. In one, the text “Got $45,000 almost INSTANTLY” appears on screen as a female narrator says to man, “Babe, where’d you get all that money?”
Like Lavish Finances, PersonalLoanPro asks for sensitive information. It says it will then refer applicants to lenders who may offer them loans with interest rates of up to 35.99% APR over terms of up to 15 years.
PersonalLoanPro’s site indicates it is owned by a Durango, Colo.-based company called On The Barrelhead. Emails sent to both PersonalLoanPro and On The Barrelhead went unanswered, while a call to a phone number from On The Barrelhead’s site went straight to voicemail.