An overwhelming number of influencers are posting misleading ads as it gears up to improve the industry, according to the consumer watchdog.
The Australian Competition and Consumer Commission (ACCC) has investigated the advertising practices of social media influencers and identified a number of issues.
After reviewing 118 influencer accounts, the ACCC found that at least 81 percent had posted posts likely to contain misleading advertising under Australian consumer law.
The competition watchdog has found that more than 80 percent of Australian influencers made social media posts that contained misleading advertising (stock image)
Fashion influencers were the biggest offenders when it came to misleading advertising, with 96 percent concerned.
The survey also found that 73 percent of gaming and technology influencers expressed concerns.
Influencers and brands looking to work with them should review their practices and improve compliance with consumer law, ACCC acting chair Catriona Lowe said.
“Influencers often cultivate an image of themselves as relatable and genuine, which can create an element of trust among their followers when it comes to recommendations,” says Lowe.
“Based on the findings of our investigation, we are concerned that influencers, brands and advertisers are abusing consumer trust through hidden advertising in social media posts by influencers.”
The main issue the consumer watchdog found was that influencers were not disclosing brand affiliations or payments in their posts.
ACCC acting chair Catriona Lowe said influencers, brands and advertisers are taking advantage of consumers (stock image)
Most influencers were found not to have disclosed that they were sponsored by brands when promoting their products on social media
“Many of the influencers we reviewed did not provide sufficient information in their posts that suggested they received payments, gifts or other incentives to promote brands, products or services,” Ms Lowe said.
Even when influencers announced ads, they often did so with vague or confusing language, such as “sp” or “spon” instead of “sponsored.”
“We found that many influencers were formatting their posts to hide the disclosure of their ads or make it difficult for consumers to notice them.”
'Under the Australian Consumer Law, businesses cannot mislead or defraud consumers. This applies to influencers engaged in trade or commerce, as well as brands and marketers who use influencers to advertise online.”
“Influencers and brands could be breaking the law if they don't take reasonable steps to ensure consumers aren't misled into believing sponsored posts are real.”
The ACCC will release guidance in early 2024 for influencers and companies outlining their obligations under the Australian Consumer Law to disclose advertisements in social media posts.