According to thousands of allegations received by the US Federal Trade Commission (FTC) in 2021, fraudsters are increasingly targeting Americans on social media. The FTC revealed that approximately 95,000 US customers reported losses of $770 million due to social media scams. This accounts for over a fourth of all fraud losses recorded in 2021.
The most successful social media frauds were those proposing phony investment possibilities, with money and cryptocurrencies mentioned in more than half of reports in 2021. After hitting record highs in recent years, romance scams were the second most profitable scam on social media. However, most fraud reports connected to social media were made by customers who had lost money to online shopping schemes in which advertised items were not delivered.
“In nearly 70% of these reports, people said they placed an order, usually after seeing an ad, but never got the merchandise,” the FTC added. “Some reports even described ads that impersonated real online retailers that drove people to lookalike websites.”
According to social media networks found in reports of investment scams, online shopping fraud, and romance scams, Facebook and Instagram were the most popular sites among fraudsters. While these frauds accounted for more than 70% of all reported losses related to social media scams last year, the Federal Trade Commission claims that there are many more types of social media fraud, with new ones appearing all the time.
To avoid being scammed on social media, the FTC has provided the following advice:
- Limit who may view your social media postings and information. All platforms acquire information about you through your social media activity, but you may set certain limits in your privacy settings.
- Call a colleague or friend if you receive a message from them concerning an opportunity or an urgent need for money. It’s possible that their account has been hacked – especially if they request you to pay using cryptocurrencies, a gift card, or a wire transfer. Scammers will ask you to pay in this manner.
- Slow down if someone approaches you on social media and urges you to create a relationship or romance. Also, never transfer money to someone you haven’t met.
- Check out the company before buying. Look for the company’s name with the words “scam” or “complaint” on the internet.
- Check to see if you can opt-out of receiving tailored advertisements. This is something many platforms allow you to accomplish.