They look like natural online conversations but in fact they are advertising loans that charge as much as 1,000 per cent in interest.

The conversations are happening all over social media websites. They take place in community groups and on local selling pages. They are friendly, chatty and hard to identify as commercial. And they are selling high interest loans.

Sometimes the social media posts are straightforward: “Any1 looking for a loan I had a good experience with this company #ad.” “Hi if you’re looking for a loan then try this, they really helped me out and you can get your money really quick.”

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More often they seem to work in pairs. One will post: “Anyone know where I can get a quick loan without a guarantor? #ad” And another will reply with a suggestion, maybe even a link to a broker, adding a comment that suggests this is a review rather than an advert, such as: “I had £800 last Christmas off them and they really helped me out #ad.”

The hashtag is the only acknowledgement that the comments are adverts, promoting and linking to brokers selling high interest loans for people with poor credit. Some of the loans being sold this way have APRs amounting to more than 1,000 per cent. Are these adverts posted by genuine people earning commission or are they fakes? It’s hard to know.

There are adverts for social media sellers across many job boards, offering commission-based income for people who promote products and services online. Selling online is a huge industry whether it’s big brands advertising or self-employed people. It’s hard to identify just how much such advertising is taking place as many social media groups are closed to non-members.

The Independent contacted eight people seen selling loans and asked them to speak to us about it. None replied but they all deleted the posts we had replied to within hours, suggesting they did not welcome the scrutiny.

Risky business

Charlotte Burns, a blogger behind the LottyEarns website, recently warned her readers about the risks of applying for a loan based on social media posts. She told us there’s a real risk that some people will not recognise that these posts are adverts.

“If you’re super savvy with online selling, you may know what #AD stands for,” she says. “There will be thousands of people who don’t know what that means who will be duped by the way the advert is set out. However, even if you do know what #AD means, you could still easily miss it.

“And that’s the key thing for me – people have advert expectations. They know when a celebrity is holding a weight-loss tea that they expect it to be an advert or when a magazine is flogging a product – we expect adverts to feature here.

“But we aren’t used to or expecting adverts in places where brands aren’t supposed to live. They don’t look like adverts – it looks organic. It’s insidious.”

Fair. Clear. Not misleading

Back in 2015 the Financial Conduct Authority published guidance on financial promotions in social media, requiring firms to give customers the right information in a way that is fair, clear and not misleading.

Many of the adverts we saw posed as natural conversations with seemingly real people asking for advice on where to apply for a loan, and other apparently genuine people replying and advising. The #ad was the only sign that the thread was not genuine and on two of the posts we saw it was not included in every message.

The Advertising Standards Agency set out guidance in 2016, warning against advertising that trivialises short-term, high-interest loans. It said adverts must not place “undue emphasis on the speed and ease of access to a loan, the promotion of a loan for non-essential purchases or as a solution to financial difficulties”.

Several of the social media adverts seen by The Independent did just that, suggesting loans as a way to pay for Christmas and making the ease and quickness with which the cash could be paid a selling point. Whether this kind of social media selling of high interest loans is within the limits of the law or not, it’s something everyone should be careful approaching.

Burns adds: “Facebook groups are the modern-day community centres where people seek advice and friendship from peers in their local community. Getting financial advice from untrained people in these groups is far from ideal, even when intentions are good, but now we need to factor in that there are paid people in there flogging loans as if it is genuine advice. It’s dangerous.”

Commenting on the ads, a Facebook spokesperson said: “We don’t want any fraudulent or misleading behaviour on Facebook, full stop. Scammers are bad for people, and they’re bad for our business so we are constantly working to identify and shut down this kind of activity. We urge people to keep using our reporting tools to let us know if there is something on Facebook that shouldn’t be, so we can take action.”

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