Why a TikTok trend is highlighting the importance of financial education for young people.

Thousands of Americans have fallen victim to a social media trend that went viral. This glitch at a popular consumer bank highlights the need for holistic financial education here in the UK. As young people increasingly turn to social media for news, information and advice, it is essential we equip them with the ability to apply critical thinking to money choices.

At the end of August, a trend on TikTok highlighted an issue with an American bank’s cash machines, allowing people to withdraw large sums of money out of the machines using fake cheques. Videos of people celebrating as they withdrew thousands of dollars circulated and encouraged others to take advantage of the glitch.

It has become clear, as the story has developed and experts in fraud have shared their knowledge, that those taking part in the TikTok trend were not aware that they were committing cheque fraud or the consequences for that.

The individuals involved in the “infinite money glitch” could face serious charges, including cheque fraud. It could also impact their long-term financial wellbeing, as the incurred debt could make it difficult to access a bank account or any loans or credit based activities in the future.

Young people turning to social media for financial guidance is not an issue unique to the USA. Reports from Natwest show that 17% of 18-24s in the UK also turn to social media for savings advice. Recent research from the London Foundation for Banking & Finance highlighted how young people were turning to social media for advice is increasing, rising from 19 per cent in 2022 to 23 per cent in 2023. The report, which came out ahead of TikTok trend, sounded that alarm that this could lead to significant financial harm as “information on social channels and via influencers is largely unregulated unless posted by a regulated firm or accredited/approved organisation.”

At JFF, we recognise that many individuals in the UK missed out on the opportunity to access financial education at school. This can lead to challenges with financial literacy as adults, which can impact our understanding of legal and ethical standards in financial transactions. In turn, this can lead to increased susceptibility to making impulsive decisions, such as exploiting bank system errors. The recent cash machine glitch is a prime example of this, further emphasising the critical need for holistic financial education that equips people not only with the necessary knowledge and skills, but also the values and emotional insight to make financial choices responsibly.

The skills and values we need to manage money begin to develop between the age of three and seven. By investing in the financial education of young people in the UK, we will help improve the long-term choices future generations will make, and empower them to avoid similar scams and harmful trends.

Sarah Wallace, Director of The Just Finance Foundation, emphasized the importance of early financial education, stating, “At JFF, we believe that financial education is about more than just skills; it’s about understanding how we feel about and relate to money. By empowering children with this education from a young age, we can foster a culture of informed decision-making that leads to lifelong financial wellbeing.”