$2.7 billion lost to social media scams since 2021
Scams originating on social media have accounted for $2.7 billion in reported losses since 2021, more than any other contact method, according to the Federal Trade Commission.
Social media gives scammers an edge in several ways. They can easily manufacture a fake persona, or hack into your profile, pretend to be you, and con your friends. They can learn to tailor their approach from what you share on social media.
And scammers who place ads can even use tools available to advertisers to methodically target you based on personal details, such as your age, interests, or past purchases. All of this costs them next to nothing to reach billions of people from anywhere in the world.
In a new data spotlight, the FTC also takes a deep dive into social media scam trends in the first half of 2023. Reports during the first half of the year show that the most frequently reported scams on social media are related to online shopping, with 44% of reports pointing to fraud related to buying or selling products online.
Most of these reports come from people who never received the items they ordered after responding to an ad on Facebook or Instagram.
Cryptocurrency fuels majority of investment scam payments
While online shopping scams are the most commonly reported scam on social media, the spotlight notes that scams using social media to promote bogus investment schemes account for larger overall losses, accounting for 53% of all the money reported lost to scams on social media in the first half of the year.
Cryptocurrency played a significant role in the investment scams consumers reported; more than half of the reports showed that consumers paid the scammers using cryptocurrency.
After investment scams, the spotlight noted that romance scams accounted for the second-most reported scam losses on social media.
The FTC recommends that consumers take steps to limit who can see their posts or contact them on social media, and to reach out directly by phone if someone claiming to be a friend or relative messages on social media asking for money.