Portugal: Experts Warn of Risks of Financial Disinformation

Financial experts are sounding the alarm about the growing threat of financial misinformation in Portugal, where only 11% of the population demonstrates high financial literacy, according to European Commission data.

Bárbara Barroso, CEO and founder of the Money Lab school of financial literacy, defines financial misinformation as “all incorrect, incomplete or misleading information that negatively influences people’s economic decisions.” Speaking to Lusa news agency, she emphasized that the digital age has dramatically increased exposure to unreliable financial content.

“This misinformation has real consequences, because it leads people to make wrong decisions, to distrust legitimate institutions unfairly or, at the extreme, to fall for fraudulent schemes,” Barroso warned.

The problem manifests in various forms, from viral social media posts promising guaranteed quick returns to sophisticated fraud schemes disguised as legitimate investment opportunities. Earlier this month, Lusa Verifica reported on fake videos circulating on social media featuring prominent Portuguese public figures like Prime Minister Luís Montenegro, Bank of Portugal Governor Mário Centeno, and banker Paulo Macedo. These manipulated videos promoted fraudulent trading platforms claiming to turn a €250 investment into millions.

Elderly citizens are particularly vulnerable, according to Barroso, due to their unfamiliarity with digital platforms and tendency to trust messages that appear credible but may conceal fraudulent schemes. She argues that financial literacy serves as the critical first line of defense against such misinformation.

“In a world where information circulates quickly, but not always truthfully, financial education is the filter that separates the real from the illusory, the safe from the dangerous,” Barroso stated.

Pedro Braz, co-founder of the Financial Literacy project, adds that misinformation isn’t limited to social media. “Often, it is also born at bank branches themselves, when customers receive partial or biased advice,” he told Lusa.

Braz highlighted that one of the most dangerous narratives in financial misinformation is the belief in “magic formulas” for wealth creation. He emphasized that critical thinking is essential for recognizing empty promises and distinguishing them from sound financial advice.

Both experts pointed to Portugal’s concerning financial literacy statistics. According to European Commission Eurobarometer data, Portugal ranks among the lowest in Europe for financial literacy, with just 11% of its population demonstrating high-level financial knowledge.

This literacy gap creates fertile ground for misinformation to spread. While Portugal has made some progress in financial education initiatives in recent years, Braz noted that “the majority of Portuguese still have difficulties with basic concepts of personal finance.”

Financial institutions bear some responsibility for this knowledge gap, according to Barroso, who criticized the lack of accessible, educational communication by some organizations. This communication failure creates space for confusion and mistrust among consumers seeking financial guidance.

The experts’ warnings come at a time when financial scams are becoming increasingly sophisticated worldwide, often using artificial intelligence to create deepfake videos of trusted public figures to lend credibility to fraudulent schemes.

Financial regulators across Europe have stepped up efforts to combat such scams, but the experts emphasize that individual financial literacy remains the most effective protection against falling victim to financial misinformation and fraud.

As digital financial services continue to expand and investment options become more complex, the need for improved financial literacy among Portuguese citizens becomes increasingly urgent, particularly for vulnerable populations like the elderly who may lack digital savvy but control significant assets.