Australian influencers overwhelmingly taking part in misleading advertising

An overwhelming number of influencers are posting misleading advertisements according to the consumer watchdog as it gears up to improve sector.

The Australian Competition and Consumer Commission has been conducting sweeps of the advertising practices of social media influencers which has identified a number of issues.

After reviewing 118 influencer accounts, the ACCC discovered that at least 81 per cent had made posts that likely contained misleading advertising under Australian consumer law.

Fashion influencers were the worst offenders when it came to misleading advertisements, with 96 per cent raising concerns.

The study also showed that 73 per cent of gaming and technology influencers raised concerns.

Influencers and brands looking to partner with them need to review their practices and improve on following consumer law according to ACCC acting chair Catriona Lowe.

“Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations,” Ms Lowe said.

“Based on the findings of our sweep, we are concerned that influencers, brands and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers.”

The main issue the consumer watchdog came across was influencers not disclosing brand relationships or payments in their posts.

“Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts or other incentives to promote brands, products or services,” Ms Lowe said.

Even when influencers disclosed advertising, 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 their advertising disclosure or make it difficult for consumers to notice it.”

“Under the Australian Consumer Law, businesses must not mislead or deceive consumers. This applies to influencers engaging in trade or commerce, as well as brands and marketers using influencers to advertise online.”

“Influencers and brands may break the law if they do not take reasonable steps to ensure consumers are not misled to believe that sponsored posts are genuine.”

The ACCC will release guidance in early 2024 for influencers and businesses outlining their obligations under Australian Consumer Law to disclose advertising in social media posts.