Australian beauty YouTube sensation Chloe Morello has done her best to blow the lid on the ‘influencer’ industry, alleging many of those with substantial followings are committing fraud by buying their following rather than building their profile authentically.

Morello, who started her blogging career back in 2008 and started creating beauty content for YouTube in 2012, says she believes many of the ‘influencers’ she is surrounded by have been landing major contracts with makeup giants on the basis of fake followers.

“Instagram is a big business,” she says in her latest YouTube video. “So many people want to be part of this world.”

“The reason I am making this video is because I am seeing social media influencers on Instagram – and this is going to sound so dramatic, but keep in mind social media is a billion-dollar business where brands are paying influencers a lot of money – and I am seeing influencers come up and actually committing fraud by fraudulently acquiring followers, likes and comments.

“It’s definitely frustrating seeing people getting the same opportunities as me, going to the same events or even ones I didn’t get invited to… when I have done a lot of research and believe their following is fake.”

Out of context, Morello is right. The concept of fraud within the influencer and Instagram industry sounds dramatic, if a little first world.

But the point she desperately wants to portray is an important one: Whatever you think of Instagram and the kind of shallow narcissism it can appear to celebrate, it’s a big, booming business. Careers are made and lost in follower counts, and because the pace of the industry has grown exponentially, regulation hasn’t had the opportunity to keep up.

“Brands are paying top dollar, thousands of dollars, for posts with this people … but some of these people have no followers. And at the end of the day, the brands are investing their money in these people to sell product,” Morello explains.

The beauty blogging industry works simply: Brands will pay influencers thousands of dollars to create content around their product. The idea is that either the content generates sales directly, or creates publicity that generates sales in the long run.

Morello knows there will be a group of people watching her video or listening to her case wondering what the big deal is. She acknowledges as much in her latest video, but denies the basis of that argument.

“I think it does matter. Because a makeup brand will want to work with these people based on their following and their engagement.

“So, the brand is paying for nothing. The brand is paying for fake followers, fake likes and fake comments and that’s fraud.”

There are a few ways to make sense of different followings to ensure they’re authentic, she says.

Firstly, Morello says she believes many bloggers are buying followers to keep up with the pace of the industry. The way she knows this is by going onto a website called Social Blade, and typing in the username of an influencer she suspects of fraudulently acquiring followers.

What happens next, she says, is where things get interesting. When the username is typed in, some stats will appear. Among these is a graph, showing the growth of the influencer in question’s following.

Morello compares the growth of her own following – currently sitting at one million – compared to the growth of two influencers she does not name, but whom she suspects of buying followers.

It looks like this:

The idea, of course, is that Morello's graph (top) shows a fairly consistent growth over the course of two years. The other two graphs are populated with jaggad lines and sharp increases, hinting they may have purchased followers. After all, how else do you explain such quick and dirty surges in followers on a consistent basis?

It should be noted here, much like Morello notes in her own video, that the Instagram stars you're fans of are likely to have authentic followings. It makes logical sense: it's more likely to be the ones you haven't heard of, because after all, their percentage of authentic followers is small. They're not actually followed by real people and therefore aren't likely to have much of a reputation.

Naturally, it's worth considering that certain events can lead to a sharp and totally legitimate increase in followers. Perhaps it's a shout-out, the birth of a baby, an appearance on a television show.

For context, let's look at model and former Block contestant Elyse Knowles. Knowles was a popular model before becoming a reality TV star, and her star power has increased significantly since she graced our screens.

A graph detailing her Instagram follower growth is consistent and natural. Her follower count increased hugely over the time she was on TV, but the line is steady. There are no jagged lines. Her following, just by glancing at this, is authentic.

Aside from the buying of followers, Morello also touches on "commenting pods" -  another way in which influencers 'fake' engagement on their profiles. Commenting pods, she says, are essentially underground communities of Instagram influencers who all commit to commenting on each other's photos when a new post is live. In short, it makes it look like a photo has great engagement with likes and comments. And although the comments are coming from real people themselves, rather than automated bots, at the crux of the practice is still false engagement.

If you're a brand investing money in an influencer and all their engagement comes from other influencers as part of an underground deal, then it's not quite the eyeballs you're after as a means of selling your product.

All smoke and mirrors, if you will.

Make no mistake - this isn't just a handful of influencers. After Mamamia did some investigation work of our own, a large number of 'Instagram influencers' and beauty bloggers appear to have acquired their following in a suspicious way.

"I'm worried," Morello notes in her latest video. "People are going to get sued. People are going to get fined by the ACCC."

After all, they've been signing contracts to create content and promote that content to a following that, occasionally, doesn't exist. And when that happens, Morello's right. It's fraud.

We have an entire YouTube and Instagram industry that's grown quickly and without accountability. And for that, Morello says, brands and consumers are losing out.

Listen: Is this Instagram account problematic?