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Australian social media influencers are overwhelmingly posting misleading content, a new report has revealed.
In a sweep that examined more than 100 influencers and their sponsored content, the competition regulator identified 81 per cent of posts as potentially misleading endorsements and testimonials.
In fact, influencers are incentivised not to disclose endorsement deals or be transparent in their advertising as their influence "largely relies on their authenticity", the Australian Competition and Consumer Commission report said.
"Influencers often aim to present themselves as real, ordinary people and as such, their followers may trust their opinions and recommendations more than those presented through traditional media advertising," the latest Digital Platform Services Inquiry read.
Furthermore, influencer advertising is integrated with an influencer's non-commercial editorial content, "often making it difficult for consumers to distinguish".
Influencers need to be clear if there are any commercial motivations behind their posts and a failure to do so may mislead consumers into thinking testimonials are genuine and prevent them from making informed choices, the report concluded.
"Consumers are unable to make informed choices about purchases when endorsements and sponsored posts are not clearly disclosed," ACCC chair Gina Cass-Gottlieb said.
The ACCC launched a sweep earlier this year to identify misleading testimonials and endorsements by social media influencers, examining the content from 118 influencers after receiving more than 150 tip-offs from consumers about potentially misleading posts.
Influencers were found to be giving unlicensed financial advice, irresponsibly promoting therapeutic goods and cosmetic surgery and inadequately disclosing sponsored content.
The report also found a range of harms to consumers across social media including the prevalence of scams.
Australians reported losses of over $80 million to scams initiated on social media alone in 2022. This is up from reported losses of $56 million in 2021 and $27 million in 2020.
"Only a fraction of people scammed ever report it," Ms Cass-Gottlieb added.
The ACCC said it would be embarking on "various education, compliance and potential enforcement activities" and called for the disclosure of sponsored posts to be improved.
