Only one in four Britons trusts social media and users would like to see tighter regulation, according to the annual Edelman Trust Barometer.
Its survey found two-thirds of Britons believe platforms such as Facebook and Twitter are not doing enough to prevent illegal and unethical behaviour, including cyber-bullying and extremism.
But faith in traditional journalism rose sharply in the last year.
Edelman said it was time social media companies sat up and listened.
"The public want action on key issues related to online protection, and to see their concerns addressed through better regulation. Failure on their part to act risks further erosion of trust and therefore public support." said Ed Williams, chief executive of Edelman UK, a marketing and public relations firm.
More than half of Britons worry about fake news, Edelman said, while 64% said they could not distinguish between proper journalism and fake news.
The survey showed:
- 64% of Britons believe that social media companies are not sufficiently regulated
- 63% believe they lack transparency
- 62% believe they are selling people's data without their knowledge
The survey sampled 3,000 respondents in the UK. A third of them were in the 16-18 age group.
Edelman research also looks into which sources respondents consider as "very/extremely credible". People show a high level of confidence in their peer group, with 54% choosing "a person like yourself" as source.
Trust in business and specialist experts is also rising, and journalists saw their biggest gain since the survey began. Although trust in government officials has increased, it is now bottom of the league
'Depressing and biased'.
Traditional media, including broadcasters and print, enjoyed a rebound in public confidence, up 13% compared with last year to a record high of 61% approval.
A third of Britons are consuming less news overall, according to the survey, citing as reasons that it is "depressing", "too biased" and "controlled by hidden agendas".
This was leading one in five people to switch off from the news altogether, Edelman said. Half of us skim headlines on social media, but don't click on the content. The trend was most pronounced amongst higher educated senior executives over 40 living in London.
The proportion of people who describe themselves as "informed" (reading business and political news several times per week at least) has halved from 12% to 6%.
"As we look at some of the big problems we face in the 21st Century, it should be of significant concern to us all that we are becoming a nation of news skimmers and news avoiders," said Mr Williams.
"It's frightening that the professional classes, the people we rely on to take an interest in social affairs and to hold politicians to account, are the most pronounced news avoiders."