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TikTok Is Banning ‘Get Rich Quick’ Pyramid Schemes

by : Hannah Smith on : 17 Dec 2020 11:41
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TikTok is banning the promotion of products or membership of ‘get rich quick’ schemes, after users exposed a number of scams circulating on the platform during lockdown.

The social media app announced the move as part of an update to its community guidelines this week, which now explicitly ban ‘content that depicts or promotes Ponzi, multi-level marketing, or pyramid schemes’.

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The new policy also covers content that promotes ‘investments schemes with promise of high returns’. TikTok will remove posts that are flagged by moderators or reported by users, as well as using its automated content-monitoring systems to detect potentially fraudulent content.

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A spokesperson for the platform told Buzzfeed News:

[TikTok has] multiple measures in place to reduce the spread of misleading content, including content that aims to deceive people for financial gain.

We remove content and accounts that violate these guidelines, which we identify through a combination of technology that automatically flags content to our moderation team for review, proactive investigation, and reports we receive from our community

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Pyramid schemes are illegal businesses that make most of their profits from getting existing members to recruit other members to sell or distribute (often fake) products. Multi-level marketing schemes (MLMs) similarly rely on recruiting members, but are legal as long as the majority of the profits are made through legitimate product sales.

MLMs have gained popularity on TikTok and across social media platforms as a supposedly easy way to make money quickly through ‘sponsored’ content. The schemes are often modelled after the type of endorsements you’d find on a Kardashian or Love Island contestant’s Instagram account, promoting weight loss supplements, essential oils or other unproven wellness products. The scams tend to target younger GenZ women by taking advantage of the idea of becoming an influencer, or a ‘girlboss’ – young female entrepreneurs who grow their businesses largely through social media.

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With the current pandemic leaving young people increasingly struggling to find jobs, these MLM schemes can seem attractive propositions for students and young people looking for an easier way to make money. However Vice reports that only 1% of MLMs members actually make a profit from their involvement in the scheme, meaning that in the vast majority of cases, members are left worse off financially than when they signed up.

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TikTok’s move to ban MLMs comes after a growing number of people – many of them former MLM members – began exposing the rise of the schemes on the app.

TikTok is not the first social media platform to ban content promoting MLMs. Facebook’s list of prohibited advertising content also restricts ‘business models offering quick compensation for little investment, including multi-level marketing opportunities’, while an Instagram spokesperson told UNILAD that the platform had ‘long removed’ MLM schemes under their Fraud and Deception policies.

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Topics: Technology, influencers, Now, Social Media, TikTok

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Buzzfeed News
  1. Buzzfeed News

    TikTok is banning MLMs and other 'content that aims to deceive people for financial gain'