INFLUENCER FRAUD REGULATORY
followers, and their followers and the engagement with their content is real, there is no fraud.
Like all influencers, virtual influencers must not mislead consumers. This means that if they are fictional, that should be clear from their bio, and additionally they are required to use #ad when promoting a product or service, to indicate to their followers that their content is an advert.
WHAT ABOUT FAKE SPONSORED CONTENT?
Just as some influencers fail to disclose that their content is promotional or paid for, the opposite problem is also sometimes true. Instead of avoiding the #ad tag, some content creators are using it on content which is not sponsored and are tagging brands they have no affiliation with. Their aim is to be perceived as an influencer in the hope that brands might engage them as such. Tagging content which is not sponsored with #ad is as misleading as failing to disclose content which is promotional.
HOW CAN YOU SPOT A FAKE? Fraud may not be obvious at first glance, but if you look carefully, you may see tell-tale signs that an influencer is, in some way, fraudulent. Look at: • The influencer’s follower curve: Spikes and sharp drops in follower numbers can indicate the buying or removal of fake followers;
• The location of followers: A large number of followers located in a country with which the influencer has no link may indicate use of a click farm;
today’s demanding consumer audience, culminating in a detrimental impact on associated brands.
ARE VIRTUAL INFLUENCERS FRAUDSTERS?
Influencer fraud is not to be confused with virtual influencers. Virtual influencers are fictional, computer-generated people or characters. They are given a personality and a backstory, and they act on social media platforms in the same way as a real influencer.
It may be obvious that they are fictional (Barbie, for instance, is one of the most popular virtual influencers) or they may have a more realistic profile. Even if the influencer is fictional, as long as they are transparent with their
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• Comments on posts: Do they make sense? Are they repeated? Are they made by like-minded people? Large numbers of comments by people in seemingly unconnected industries may indicate use of coerced engagement pods;
• Engagement: A large number of followers but low engagement may indicate fake followers, or it could simply mean that this influencer is not as popular as they once were.
WHAT CAN YOU DO ABOUT INFLUENCER FRAUD?
The key is to engage influencers that you trust: a genuine relationship between influencer and brand will result in more authentic content and consequently more engagement. So, what can you do if you discover that the influencer has acted fraudulently?
First you should look at your contract with your influencer. Ideally it will contain the following clauses: • A warranty that the influencer’s following and engagement is genuine, and agreement that it will continue to be for the duration of the agreement;
• A requirement that the influencer use #ad to denote that the content they post is advertorial in nature;
• An indemnity to cover any loss sustained by your brand if the influencer breaches the contract in any (material) way. Whether this is effective or not will ultimately depend on whether the influencer has sufficient funds to pay out, should the need arise;
• A right to terminate if the influencer breaches the contract in any (material) way;
• Payment in instalments so that if the relationship ends you only pay for the content that has already been posted;
• You should also state explicitly that use of fraudulent, coerced or paid for followers or engagement constitutes material breach. You can also look to the social media platform’s T&Cs. You will need to check the platform’s exact terms, but if you are satisfied that the influencer’s behaviour constitutes a breach, you can report them to the platform via the ‘report a problem’ function. If you want to take things further, consider whether you have a claim for misrepresentation. If your influencer has made an untrue statement which has induced someone else to enter into a contract (eg, has caused a consumer to buy something), the influencer could be liable for misrepresentation. Misrepresentation can be fraudulent, negligent or innocent.
In the case of fake sponsored content, if someone is misrepresenting a connection with your brand and that is causing your brand damage, you could bring a claim for passing off. A final option that is open to brands and consumers alike is to complain to the Advertising Standards Agency (ASA). The ASA requires advertisers, including influencers, to act in a way that does not mislead consumers. They have the power to get content taken down, as well as to name and shame influencers (and brands) that don’t comply with their rules
Author Iona Silverman, Freeths
www.freeths.co.uk
January 2023 45
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