For the past week and half, the social media feeds of many Aboriginal and Torres Strait Islander people have been flooded with clips from the same video, posted by a self-declared Australian comedian.

This video shows a white woman wearing a fur coat with white dot painting on her face. She refers to herself as “Aunty Lisa”, and claims that she is Aboriginal, after ticking yes on an Aboriginal identity form. At the end of the video, she says, “I am Aboriginal, end of story”, before sniffing a red jerry can, in an apparent reference to petrol sniffing, a serious issue affecting some Indigenous communities.

For First Nations people, this is not, sadly, an unusual experience. Online racism is growing, bubbling up through social media algorithms that reward and promote divisive content. A federal parliamentary inquiry into racism, hate and violence directed at Aboriginal and Torres Strait Islander peoples received more than 420 submissions, many of which describe an increasingly toxic online environment.

The Australian Human Rights Commission, in its submission, recommended the government introduce a digital duty of care to require social media companies to “identify, assess and mitigate foreseeable risks arising from recommender systems and monetisation practices that incentivise the amplification and normalisation of racist narratives”.

Guardian Australia read hundreds of submissions to the inquiry.

Carl Lymburner and Irene Leard established Townsville-based support group Helping Our Mob Everywhere (Home). Their submission describes a rise in offensive content targeting First Nations organisations, groups and individuals including elders.

Leard tells Guardian Australia she hears stories of racism every day from those she works with. “It doesn’t matter where they go, they’re judged, they’re labelled, they’re automatically alleged that they’re doing something wrong,” she says.

“These narratives create real-world harm, intimidation, threats and community division.”

Lymburner adds: “I thought anything racist [said on social media], anything tech related is to be banned and put down, but Facebook and all the other platforms just seem to let them go.”

Sam Bennell started a social media account to share his deep love of Noongar culture and language. The 27-year-old gained nearly 10,000 followers in just a few months across Instagram, Facebook and TikTok, but says when he began sharing more of the traditional culture and language from south-west Western Australia he noticed a distinct change in the comments left under his posts.

“All the racists started commenting,” he says.

He told Guardian Australia that his videos appeared to be pushed to a wider audience, which was attracting negativity. “Facebook seems to be pushing my content to racist for some reason, which I don’t get,” he says. “I haven’t been posting lately because it has been taking a toll on my mental health … all that online stuff is just crazy.”

‘This isn’t edgy comedy’

The video doing the rounds this month was posted by Victorian woman Lisa Jane Spencer, and has been widely criticised as mocking First Nations culture and identity and perpetuating racist and harmful stereotypes. Spencer defended the video as a “satirical skit” and told Guardian Australia “there should be no limits with comedy in terms of who and what someone can make fun of”.

She compared it to the character of Aunty Tiffany on ABC’s Black Comedy – a program written and created by and for Indigenous Australians – and characters played by comedian Chris Lilley. Asked if she had intentionally pitched her content to appeal to social media algorithms, Spencer said: “no. I make comedy that I love and find funny”.

Kamilaroi man and content creator Jordan Hindmarsh-Keevil, known to his more than 80k Instagram followers as Your Online Brother, said he felt the timing of Spencer’s video, which came at the end of Reconciliation Week, was “deliberate and harmful”.

“This isn’t edgy comedy, it’s racism hidden as ‘comedy’ as a cover to dehumanise and make our people reactive whilst being able to say, ‘it’s just a joke,’” he says. “She has since doubled down, making another video mocking a welcome to country, including more jerry cans hidden throughout the video.”

Spencer’s video was live for nine days before Meta removed it from Facebook and Instagram for breaching their community standards policy on “hateful conduct”.

In a statement, Meta said it recognised First Nations communities “can be disproportionately targeted by online hate, and we take this issue seriously”.

“Our Hateful Conduct policy prohibits attacks against people based on protected characteristics, including race, ethnicity and national origin. This includes dehumanising speech, harmful stereotypes, and calls for violence or exclusion,” a spokesperson said.

They added that they engage with First Nations communities and others to “better understand how racism manifests online and to improve our systems,” and encourage anyone who sees racism on their platforms to report it.

After Spencer’s video went viral, she announced on Instagram that she was “fired on the spot” from her workplace as they did not support or endorse content that is “inconsistent with our values”.

Since then, more than $49,000 has been raised for Spencer through GiveSendGo, a Christian-focused online crowdfunding platform. That company’s terms of service state that “fundraisers that are racist, hateful, potentially libellous, support or promote physical violence, or are intended to financially benefit individuals for the commission of violent crimes are not permitted”. Spencer said she did not believe the fundraiser supporting her breached those conditions. GiveSendGo did not respond to questions.

She has since posted two more similar videos.

Hindmarsh-Keevil used the backlash to Spencer’s video to do fundraising of his own, encouraging followers to support his online mental health course for Aboriginal people, which works on a pay-it-forward model. He says more than 500 places have been paid for this month, partly in response to Spencer’s video.

He told Guardian Australia that videos such as Spencer’s “directly affects the mental health and wellbeing of First Nations people – individually and collectively”.

“It’s death by a thousand cuts, when every day online means absorbing another racist comment, another unfair or untrue narrative, another round of bullying – it accumulates,” he says.

“It’s like carrying a bully in your pocket. One you nearly have to access to exist within the modern world.”

• Indigenous Australians can call 13YARN on 13 92 76 for information and crisis support; or call Lifeline on 13 11 14, Mensline on 1300 789 978 or Beyond Blue on 1300 22 4636