TikTok is letting payday lenders prey on financially vulnerable users
TikTok is once again prioritizing profits over the safety of its users, this time allowing predatory payday lending companies to advertise on the platform — despite the fact that the companies seemingly violate TikTok’s own advertising policies. TikTok is enabling the payday lending companies to explicitly target users who are struggling financially, setting them up for potential financial harm.
TikTok’s policy regarding misleading claims and inconsistent information explicitly prohibits advertisements that “contain an exaggerated performance or promise” and gives the example of “Financial Product: Get money in 10 seconds” as an unacceptable claim. TikTok also prohibits advertisements promoting “excessive purchasing of items” enabled by “loan financing.”
The payday lending companies advertising on TikTok appear to directly violate the aforementioned policies, as the advertisements make exaggerated promises of quick money with no strings attached. Earnin, Brigit, and Albert are the three lending companies that Media Matters found advertising on TikTok. They all promise to provide quick money to users who are struggling financially.
Brigit’s ads specifically targets users living “paycheck to paycheck.”
Albert’s ad promises money “instantly” and targets users who are “broke.”
Earnin’s ad targets those waiting for payday.
All three companies have faced scrutiny for deceptive lending practices that, according to consumer testimony, have resulted in additional fees or other financial harm.
In 2019, Earnin faced a class action lawsuit for deceitful lending practices — which it eventually settled for $12.5 million — from customers “alleging it engaged in deceptive advertising and failed to provide proper disclosures to its users.”
That year, NBC reported that critics of Earnin characterized it as “effectively acting as a payday lender — providing small short-term loans at the equivalent of a high interest rate – while avoiding conventional lending regulations designed to protect consumers from getting in over their heads.” In 2020, The New York Times reported that Earnin “caused more than a quarter of a million workers to incur the overdraft and other fees that it promised it would protect them from.”
The two other companies — Brigit and Albert — are not accredited with the Better Business Bureau (BBB) and both have an average customer review score of about one out of five stars. User reviews on the BBB pages for both Brigit and Albert allege unexpected fees, missing direct deposits, and bank accounts opened without the user’s knowledge.
One user described Brigit as a “predatory company at its finest” and listed grievances: “Really difficult to cancel, forces you to sign up for a monthly subscription for their ‘services,’ says they’re here to help but then when you do manage to cancel say they’re going to charge you one more time.” Another user wrote, “I borrowed $50 and they too[k] $107 out of my account.” This appears to be a pattern, as a different user claimed they attempted to get an advance from Brigit, but the money never came. They actually had funds removed from their account by Brigit while attempting to secure an advance payment.
Albert’s reviews show the company holding direct deposit funds and opening bank accounts without the consumer’s consent.
By allowing these predatory payday loan companies to advertise on its platform, TikTok is enabling them to target financially vulnerable users — and profiting from it through these ads.