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If it seems too good to be true, then it probably is, is the old adage, and it proved true during the last few days of my summer vacation, after a lovely dinner in In a moment of weakness, I started idly scrolling through photos on Instagram. My cell phone.
Among the videos Instagram’s algorithm decided I liked were people falling off surfboards or jaguars fighting alligators, but there was an ad for a Paul Smith clearance sale. I once purchased a raincoat online during a Paul Smith sale, and ads for the brand have been popping up on my Instagram feed ever since.
But none are offering the discounts I’m seeing right now – 80% off everything in the store. I quickly started filling my shopping cart with discounted shirts, socks, a questionable hat, and even a suit bag, excitedly telling my family that I’d stumbled upon the deal of the century.
“Sounds like a scam,” my son said, looking back at me as I put four loud ties into the cart. Silently despairing of his youthful cynicism, I showed him the website, the details on every page – it was clearly legit! I was attracted here by an Instagram ad. So it must be Paul Smith.
Of course that wasn’t the case, as I discovered that a few minutes after completing my order, a poorly written English email from a special address arrived in my inbox, confirming the purchase. I was lied to, lied to, and made to look like a kipper. This triggered anxious phone calls to the bank, shame at being cheated, and merciless ridicule from my family. Their ridicule was all the more potent because I had recently started a job overseeing the Financial Times’ digital output, a point they were keen to highlight.
It turns out that, in the UK at least, social media ads often breach rules against misleading advertising set by the Advertising Standards Authority, the UK’s independent advertising watchdog. TV advertising is far more stringent: UK broadcasters could be handed over to media regulator Ofcom and ultimately lose their licenses unless they enforce ASA rules on their advertisers.
The ASA has fewer tools to force social media companies to comply with its rules. In recent years, it has spent more time ensuring that social media influencers disclose when they are paid to peddle products rather than fighting outright fraud. Nonetheless, its rules explicitly prohibit misleading advertising. Article 3.1 of the ASA Code states: “Marketing communications shall not cause or be likely to cause material misleading”; 3.5 states that advertising “shall not cause material misleading by omitting the identity of the marketer”.
Meta, the owner of Instagram, denies that it allows scam ads on its platform, which in my experience is patently untrue. On Instagram, all ads are subject to a review system “that relies on automated review and, in some cases, manual review to check ads,” a spokesperson told me. She added: “This is an industry-wide problem . . . Scammers are constantly finding new ways to deceive people, which is why our systems are not always perfect.”
That’s putting it mildly. A few days after falling for the Paul Smith scam, I saw other false advertising, with Ray-Ban sunglasses being particularly popular. A co-worker found a very convincing offer on kitchen supplies at Wilko – convincing because it advertised a clearance sale for a retail chain that, in real life, was going bankrupt . At least the scammers are keeping up with the news agenda.
Ads like this must be useful to fraudsters, otherwise why would they spend money on Instagram? Counterfeits are removed as soon as they are discovered, but judging from the number I found, it seems the company’s automated systems are not up to the task.
Instagram is expected to generate more than 40% of ad revenue this year for its owner, Meta, which will reach $113.6 billion by 2022. It’s unclear how many of those came from fraudulent bookings, but it’s also unclear how long the company can continue to hide claims it’s doing everything it can to eliminate scam ads.
Perhaps when regulators finally sharpen their knives, social media companies will get their act together. Until then, be wary of ads for eye-popping sunglasses, suit bags or food processors. If this seems too good to be true, then… . . Well, you know the rest.
matthew.garrahan@ft.com
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