The threat of fake news today reaches far beyond the political arena, as Americans say that fake financial news is affecting their ability to make retirement, investment, and health care decisions.
In a recent AICPA survey of 1,018 adults, 58% of respondents said that fake financial news is a serious threat to their financial decision-making.
Fake financial news also has drawn the attention of the SEC. On April 10, the regulator announced enforcement actions against 27 individuals and entities that it said were misleading investors into thinking they were reading unbiased, independent analyses on investing websites. Instead, the SEC said, writers were being secretly compensated for touting company stocks.
The AICPA National CPA Financial Literacy Commission offers the following advice to help consumers identify fake news:
- Look for telltale signs of a hoax. If a headline makes a questionable claim, or there are grammar errors and typos in the article, this should give you pause. If you're unfamiliar with the source, research it and read other articles from that source. Investigate the author. Look for reports from other sources.
- Ensure the news came from a legitimate website and not a "spoofed" or counterfeit website.
- Watch out for sponsored content and advertorials. While these articles can look just like a standard news article, they are instead used to sell products.
- Check if the source is known for spoofs or satire.
- While your gut may tell you to react quickly to breaking stock market news, consider that most investment plans are designed for the long term. If you have an urgent financial question, ask the Money Doctors—a panel of qualified CPAs who hold the Personal Financial Specialist (PFS) credential for comprehensive financial planning, available at 360financialliteracy.org.