How spotting fake news can help financial literacy
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Believing fake news is real news can have adverse effect on financial decisions – it can keep us from making wise investments and other money related decisions. Finances are stressful enough.
Trying to figure out a budget, balancing wants versus needs, what you should be saving for retirement, and keeping up on monthly bills, throwing in fake financial news only helps to fuel the stress fire.
By learning to differentiate between real news and fake news, we begin to look at things objectively. For example: Is this great investment opportunity really a great opportunity? What makes this investment worth it over other investments? Should I jump on the investment train just because everyone else is? Watching for fake news makes us stop, think, weigh out options and then decide.
Rather than taking what we read online as fact, we are now in control of making conscious decisions about what we believe and what is best for our financial future.
News literacy = financial literacy
77% of more than 1,000 respondents in a recent AICPA poll said they believed it’s important to react quickly to breaking news. Reacting to fake news, without verifying the content, is a clear hazard. This sense of false urgency is a scare tactic very similar to tax scams.
Fake news deliberately gives false and misleading information that mirrors the look and feel of credible news sites. Extending beyond the political arena, fake news can have a real impact on your finances especially when it comes to your retirement and buying or selling a house.
How to spot fake news
Take your time
Fake financial news relies on you making an impulse decision. Avoid fake news threats by thinking through the fear of missing out and see what is beyond the horizon.
Check the legitimacy of the site
Let’s be honest. How many of us have clicked on a story on Facebook because it was in our feed and looked important or because it was shared from a friend? *Sheepishly raises hand* There is a pretty big chance that it could be coming from an engineered site.
If the article is riddled with typos, lacks hard evidence, or has a headline that makes bold claims, approach with caution. Research the website or company source if you’re not familiar with it. Check some of the author’s prior work. If the article is plagued with errors, it probably is not going through fact checkers, editors, etc. and rather from a single person. Graphics are another way to make a story look impressive, but don’t necessarily add to the credibility. Be skeptical.
Make sure the website you’re reading isn’t spoofing a legitimate site. Such websites are similar in appearance to credible sources but are designed to mislead readers. Examine the website’s “about us” section and look for reader comments.
Watch for pranks
Some fake news is designed to be a joke or satire. Especially when it is shared on social media, the intention of the “news” can lose its meaning the more it is shared, and satire can be viewed as real news.
Why does fake news exist?
Similar to financial fraud attempts, there are three main objectives of fake news:
- To get clicks in order to drive more traffic to their site,
- To get sign-ups for a subscription to “solve” the issue and
- To scam personal information that can be sold.
Spotting fake news is just another way you can help your financial well-being. Remember that Numerica is here to help. Call us at 800.433.1837 or visit your favorite branch, and let’s have more of the conversations that help you to live well.