Fake Financial News is a Real Threat to Majority of Americans
May 9, 2017 by AICPA
NEW YORK, May 5, 2017 – Fake news, deliberately false and misleading articles, has been all over the news lately. A new survey reveals that fake financial news has the potential to be a real serious problem, and it’s impacting Americans’ ability to make retirement, investment and healthcare decisions.
These often completely made up stories are presented to consumers in many forms, such as sponsored content or fake websites meant to mirror the look and feel of credible news sites.
Even worse, a majority of Americans say they feel that fake news is going to become even more prevalent in the future.
The risk of making an impulsive financial decision in reaction to a headline or article that may be designed to mislead has the potential to cause serious problems. Acting hastily does not allow the proper time to think a decision through and weigh the long and short-term financial implications.
However, more than 3-in-4 (77 percent) Americans feel it’s important to act fast to make financial decisions when breaking financial news becomes available, with 40 percent saying it’s very important to act quickly. That’s according to a new telephone survey of 1,018 adults conducted in March 2017 for the American Institute of CPAs (AICPA) by Harris Poll in support of National Financial Capability Month.
Reliable Financial Information
“Having accurate, reliable financial information is the basis for deliberate and rational decision making,” said Greg Anton, CPA, CGMA, and chair of the AICPA’s National CPA Financial Literacy Commission. “With few exceptions, making snap financial decisions is usually not a good idea. There is a fine line between reacting and overreacting, and Americans should proceed cautiously until they’re able to parse the facts.”
Reliable Financial Information
“Having accurate, reliable financial information is the basis for deliberate and rational decision making,” said Greg Anton, CPA, CGMA, and chair of the AICPA’s National CPA Financial Literacy Commission. “With few exceptions, making snap financial decisions is usually not a good idea. There is a fine line between reacting and overreacting, and Americans should proceed cautiously until they’re able to parse the facts.”
There is widespread awareness about the issue of fake financial news. Almost 3-in-5 Americans (58 percent) believe that fake news is a serious threat to their financial decision making, with more than half of those (33 percent) saying the threat is very serious. Those sentiments are consistent for both genders, among household incomes and across generations.
However, fake news is not just an abstract threat – it’s having a serious impact on Americans’ ability to navigate their financial lives. More than 3-in-5 Americans (63 percent) say that the spread of fake news has made it more difficult to make critical financial decisions. Specifically, they’re having a harder time with healthcare decisions (44 percent), investing in the stock market (40 percent), retiring (36 percent) and buying or selling a house (35 percent). Additionally, 35 percent reported having trouble deciding if they should start a business and 29 percent said it was harder to decide if they should switch jobs.
“Financial decisions around healthcare, investments and retirement can have serious, long-term implications. It can be difficult enough to understand the financial impact of proposed changes in laws and regulations without having to deal with a sea of disinformation,” added Anton. “Social media can serve to amplify the impact of fake news, particularly when many people are sharing articles that come to the same conclusion. It’s more important than ever to verify sources, check the facts and if you’re still not sure, speak to someone you trust before making any financial decisions.”
‘Fake’ is here to stay…
Unfortunately, most Americans don’t think the problem of fake financial news will be resolved in the near future. Only 14 percent say they expect fake financial news to become less prevalent in the next year or two, with 32 percent saying it will stay about the same. Whereas a majority of all Americans (51 percent) expect fake news and misleading headlines to get more prevalent, with more than half of those (30 percent) saying that it’s going to get much more common.
Fake news is nothing new, but increased awareness of the threat it places on financial decision-making can help keep Americans from being lured into making decisions that will hurt them financially. To help Americans navigate the sea of information and misinformation out there, the AICPA National CPA Financial Literacy Commission offers the following tips:
- Do your due diligence
Before hastily making an investment decision based on an article or headline, do your due diligence. Quickly reacting to market-moving news, real or fake, can be tempting but most investment plans are designed for the long term. If you have a pressing financial question, ask the Money Doctors – a panel of qualified CPAs that have attained the Personal Financial Specialists (PFS) credential for comprehensive financial planning. - Outrageous Claims
Be suspicious of headlines making outrageous claims and articles with incorrect grammar and multiple typos. Always research the source if you’re unfamiliar with the outlet and read some of their other articles. Look into the author and their sources to confirm that they are authentic. Inadequate evidence or extensive use of unnamed experts may suggest a false news story. Always corroborate the story with other reports. - Watch out for website spoofing
Spoofing is the practice of impersonating legitimate websites and posting content that appears as though it is from that site. Fake financial news articles published on these websites have the appearance of being from a credible source, but are actually designed to mislead readers. - Closely scrutinize sponsored content and advertorials
These articles are often designed to look like reported content to sell products, but are actually outside of a news organization’s editorial content. - Look out for pranks
Fake news can sometimes be hard to tell apart from humor or satire and many people can be misled. Check to see if the source is known for parody and the article is a joke – particularly if you see it shared on social media rather than on the source website.
About AICPA Financial Literacy Initiatives
360 Degrees of Financial literacy (www.360finlit.org), is a national volunteer effort of the nation’s CPAs to help Americans understand their personal finances and develop money management skills. The AICPA, in partnership with the Ad Council, has also developed Feed the Pig, a national and localized PSA campaign designed to improve financial literacy among Americans aged 25–34 by encouraging them to make savings a part of their daily lives. Both programs are free to the public.
Survey Methodology
This Harris Poll was conducted by telephone within the United States between March 24 and 27, 2017, among 1,018 adults (505 men and 513 women aged 18 and over) including 518 interviews from the landline sample and 500 interviews from the cell phone sample. Figures for age, sex, race/ethnicity, education, region and household income were weighted (using data from the Current Population Survey) where necessary to bring them into line with their actual proportions in the population.
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 418,000 members in 143 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.
The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.
About the Association of International Certified Professional Accountants
The Association of International Certified Professional Accountants (the Association) combines the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 650,000 members and students in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.
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