In 2017, everything is about fake news. Fake news manipulated the presidential election. President Trumps calls the New York Times fake news. Facebook and Google are looking for ways to combat fake news. CNN fact checks in real time.
Turns out your finances can also be at risk to fake news.
The internet has opened a world of financial advice to us. Even better, we can get a lot of it from social networks. You can ask your Twitter followers for advice; a dozen answers to a question are just a Facebook Group away; and there’s a subreddit for, it seems, literally everything.
But Reddit is being manipulated by financial services firms so that users see what the companies want them to see. If the personal finance advice you’re seeking is being paid for, it could have long-term effects on the way you handle your money.
Reddit manipulation leads to misinformation
On its surface, Reddit is simple: users submit content, and other users upvote or downvote it. The stuff that gets upvoted most is the most visible—the stuff that gets downvoted is buried. What this measures can vary. Usefulness, entertainment value, and insightfulness are upvoted; the opposite are downvoted to obscurity.
In an ideal world, these topics – and their respective votes – are genuine, representing true interest and feedback from the community. That’s not always the case.
When two journalists teamed up to see how difficult it would be to manipulate the results of Reddit, they found it easy. Surprisingly easy. In just a few hours, with a few hundred dollars, they got two stories voted to the top of their respective subreddits. One post was an outdated video for the second season of Narcos; the other was a blatantly wrong story about the UK’s Brexit vote.
How is this done? By paying for accounts, and for votes.
For anyone looking to pay their way onto Reddit, it’s important to use accounts that have a long history and a good reputation. That exemplifies a level of authenticity to other users. An account with no other posts showing up out of the blue hawking a brand is suspicious; one that’s several years old, with a variety of interests, which happens to appreciate a company appears genuine.
There’s a market out there to buy access to these kinds of accounts. Paired with services where hundreds or thousands of votes can be bought cheaply (think the Silicon Valley click farm scheme), it’s easy for a party to create content and make it visible on Reddit.
Marketing firms offer this in the guise of "reputation management." Have a (legitimate) problem with the way you’re viewed online? Use (illegitimate) rebuttals to smooth over your image. One company that sells such services admitted that, "We’ve worked on Reddit pages before…Forex companies, financial exchange, currency exchange companies." Those aren’t the type of financial institutions most people will be interacting with on a daily basis, but the deeper issue is that it’s easy for companies to manipulate communities—and therefore public opinion—and hard to trace their involvement. The latest budgeting app or robo-advisor platform could just as easily be employing these tactics.
And pay-to-play isn’t the only way companies get themselves noticed. They might be brazen enough to post anonymously and hope no one notices. As I was researching this article, I stumbled upon Wagescout attempting to do exactly that on r/personalfinance – and they were promptly found out and the post deleted.
Why go through all of this trouble? There are easier ways for companies to get the content they want in front of large groups of people: there are banners on websites, the Facebook newsfeed is essentially one long paid ad these days, there’s no shortage of publicity that can be gained from an article on TechCrunch or Medium, and fake Twitter followers are bought cheaply.
But those channels don’t always have the same user affinity of an engaged online community. Companies are banking on the authenticity of a subreddit or a Facebook group, ironically, by compromising that very thing that makes it attractive. Brand advocates by way of friends and family are invaluable, and the internet has allowed that to be globalized and, eventually, commercialized.
There’s a high risk, high reward trade off to all of this. Yes, getting "outed" as a disingenuous poster might damage a company’s reputation, but reading a social media post is like a funnel: most people only read the headlines, some people read the actual post, and few people read the comments. Some of those reached will recognize a post that’s simply advertising a service, but most people won’t and will click over to what’s being offered.
Getting the right advice online
There are a lot of reasons why people might ask for advice on an online forum.
It’s a great way to learn about a service someone might not have known about otherwise. Users can crowdsource what the best rewards credit card is, or the best student loan refinancer, or insurance company. YNAB has a thriving subreddit that's driven almost entirely by fans, and r/personalfinance is a treasure trove not only of answers, but of questions you didn’t even know to ask.
But a finance recommendation on Reddit might not be what it seems. Even coming from an established account in a community, the advice could be a thinly-veiled ad rather than a helpful solution that arises organically from discussing a problem.
None of this is to say that people should be completely turned off from looking to internet communities for financial advice. But it’s important to look at everything with a critical eye. Readers should know when posts look suspicious, and be willing to do more research before committing to a suggested technique or tool.
Online communities are a useful resource, but they should be the first step in your educational journey, not the last.