$770 Million Lost from Social Media Fraud Surge
A Report by FTC Shows that Over 95,000 US Consumers Reported Losses of Roughly $770 Million after Getting Scammed on Social Media Platforms.
The Federal Trade Commission (FTC) is an independent agency of the United States government whose primary objective is the enforcement of civil antitrust laws in the United States and the promotion of consumer welfare. The Federal Trade Commission (FTC) and the Department of Justice Antitrust Division share authority over federal civil antitrust enforcement.
According to tens of thousands of complaints received by the United States Federal Trade Commission (FTC) in 2021, Americans are increasingly being targeted by fraudsters on social media platforms.
According to the Federal Trade Commission, over 95,000 US customers reported losses of around $770 million as a result of being scammed on social networking networks.
This is roughly a fifth of all fraud-related losses recorded in 2021, representing a huge 18-fold increase over reported losses in 2017 and more than twice over losses reported in the previous year.
More than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021. Those losses account for about 25% of all reported losses to fraud in 2021 and represent a stunning eighteenfold increase over 2017 reported losses. Reports are up for every age group, but people 18 to 39 were more than twice as likely as older adults to report losing money to these scams in 2021.
For scammers, there’s a lot to like about social media. It’s a low-cost way to reach billions of people from anywhere in the world. It’s easy to manufacture a fake persona, or scammers can hack into an existing profile to get “friends” to con. There’s the ability to fine-tune their approach by studying the personal details people share on social media. In fact, scammers could easily use the tools available to advertisers on social media platforms to systematically target people with bogus ads based on personal details such as their age, interests, or past purchases.
Reports make clear that social media is a tool for scammers in investment scams, particularly those involving bogus cryptocurrency investments — an area that has seen a massive surge in reports. More than half of people who reported losses to investment scams in 2021 said the scam started on social media. Reports to the FTC show scammers use social media platforms to promote bogus investment opportunities, and even to connect with people directly as supposed friends to encourage them to invest. People send money, often cryptocurrency, on promises of huge returns, but end up empty handed.
Most Important Social Media Scams
In 2021, the most successful social media scams were those marketing fictitious investment possibilities, with more than half of complaints indicating money and cryptocurrencies lost as a result of promises of enormous profits.
After hitting record highs in recent years, romance scams were the second most lucrative kind of crime on social media, behind only identity theft.
The vast majority of fraud complaints connected to social media, on the other hand, were submitted by consumers who had their money stolen by online shopping schemes in which the advertised items were not delivered.
As BleepingComputer reports, according to the social media networks that have been recognized in allegations of investment, romance, and online shopping scams, Facebook and Instagram were the most popular channels among fraudsters, followed by Twitter.
As the Federal Trade Commission (FTC) points out, while investment scams, romance scams, and online shopping fraud accounted for more than 70% of all reported losses linked to social media scams in the previous year, there are numerous other types of social media fraud, with new ones emerging all the time.
FTC shared a few tips that will help you avoid getting scammed on social media:
- Limit who can see your posts and information on social media. All platforms collect information about you from your activities on social media but visit your privacy settings to set some restrictions.
- Check if you can opt-out of targeted advertising. Some platforms let you do that.
- If you get a message from a friend about an opportunity or an urgent need for money, call them. Their account may have been hacked – especially if they ask you to pay by cryptocurrency, gift card, or wire transfer. That’s how scammers ask you to pay.
- If someone appears on your social media and rushes you to start a friendship or romance, slow down. Read about romance scams. And never send money to someone you haven’t met in person.
- Before you buy, check out the company. Search online for its name plus “scam” or “complaint.”