The FTC stated that data suggests social media was “far more profitable to scammers in 2021 than any other method of reaching people.”
More than 95,000 people in 2021 reported losing money to a scam that started with a message, post or ad on social media, according to the FTC. Their losses totaled $770 million. Social media scams have rocketed over the past half decade as back in 2017 there were 5,000 people who reported social media scams to the FTC, with losses totaling $42 million.
“For scammers, there’s a lot to like about social media,” the FTC stated. “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.”
By far the most common type of social media scam in 2021 involved online shopping. These types of scams represented 45 percent of all reported social media scams.
In about 70 percent of online shopping scam reports, the victims told the FTC they placed an order — typically after seeing an ad — but never receiving what they purchased. In some cases, victims reported that the ads impersonated real online retailers that drove people to “lookalike” websites.
“When people identified a specific social media platform in their reports of undelivered goods, nearly 9 out of 10 named Facebook or Instagram,” the FTC stated.
Despite making up a significant portion of the scams, online shopping scams only accounted for 14 percent of the total financial loss in 2021. Investment scams accounted for the largest financial losses in 2021 (37 percent), despite representing 18 percent of all social media scams.
“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,” the FTC stated.
In cases where payment method was reported, cryptocurrency was used in 64 percent of social media investment fraud reports last year. That was followed by payment app or service (13 percent) and bank transfer or payment (9 percent).
The FTC reported in May 2021 that many victims reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus. These fraudulent sites often offer several investment tiers. The more you put in the bigger the supposed returns.
Some use fake testimonials and cryptocurrency jargon to appear credible, “but promises of enormous, guaranteed returns are simply lies.”
“These websites may even make it look like your investment is growing,” the FTC stated. “But people report that, when they try to withdraw supposed profits, they are told to send even more crypto — and end up getting nothing back.”
There are also “giveaway scams” that the FTC stated are supposedly sponsored by a celebrity or other known figure in the cryptocurrency space. These scams promised to immediately multiply the cryptocurrency people send.
But victims report that they later discovered they’d simply sent their crypto directly to a scammer’s wallet. In a six-month period, people reported sending more than $2 million in cryptocurrency to Elon Musk impersonators, according to the FTC.
Romance scams accounted for 9 percent social media scam reports and 24 percent of the total financial losses in 2021. Nearly a quarter (23 percent) of reported romance scams in 2021 started on Facebook and 13 percent started on Instagram.
The FTC stated that these scams “often start with a seemingly innocent friend request from a stranger, followed by sweet talk, and then, inevitably, a request for money.”
The FTC suggests the following tips to help avoid social media scams:
- Limit who can see your posts and information. All platforms collect information about you from your activities on social media, but some restrictions can be put in place by visiting your privacy setting.
- Check if you can opt out of targeted advertising, which some platforms allow. If you receive a message from a friend about an opportunity or an urgent need for money, call them. Their account may have been hacked. This is especially possible if they ask you to pay by cryptocurrency, gift card or wire transfer.
- If someone appears on your social media and rushes to start a friendship or romance, slow down. 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.”
More information on how to spot, avoid and report scams, as well as how to recovery money if you’ve paid a scammer, can be found at ftc.gov/scams. Spotted scams can be reported to the FTC at ReportFraud.ftc.gov.
©2022 The News-Herald, Distributed by Tribune Content Agency, LLC.
