Social media has become an increasingly popular tool among scammers in recent years, which is bad news for those of us that frequent the platforms. A new report from the Federal Trade Commission published this week called social media a “gold mine for scammers,” reminding us all of a guiding principle we should live by: Trust no one online.
According to the FTC, social media scams have increased at an alarming rate over the last five years, accounting for about $ 770 million in reported losses in 2021, a jaw-dropping eighteenfold increase from 2017, which saw $ 42 million in reported losses. The agency received more than 95,000 reports of fraud initiated on social media last year across a variety of categories, including investment scams, romance scams, and online shopping scams.
Investment scams (37%) and romance scams (24%) were the most profitable for fraudsters among those reported. (Any scam is an evil deed, of course, but those who use romance to scam are truly heartless).
In investment scams, individuals reach out to users on social media with bogus investment opportunities promising big returns, sometimes impersonating the victim's friends to get them to send money. Swindles involving cryptocurrency have surged, which unfortunately is no surprise given its boom in popularity.
Then there are romance scams, a fraud category also at record highs, which consist of exactly what their name suggests.
"More than a third of people who said they lost money to an online romance scam in 2021 said it began on Facebook or Instagram," the FTC said. "These scams often start with a seemingly innocent friend request from a stranger, followed by sweet talk, and then, inevitably, a request for money."
Online shopping was another notable scam category in the agency's report. While not as profitable as the other types of scams mentioned above, it was the fraud that people most reported to the FTC, making up 45% of loss reports. Victims of these scams bought something on social media — Facebook and Instagram were the platforms most cited — but never received their purchase.
Overall, the FTC's data shows social media earned scammers more money in 2021 than any other method of reaching people.
There's a lot for scammers to like about social media, the agency stated. For one, it's a low-cost way to reach billions of people worldwide. It's also easy to lie about who they are and their intentions, and they can even hack into the profiles of your social media connections and try to get money out of you that way. We also share way too much about ourselves online, which allows scammers to study users' personal information to better target their scheme.
“Scammers trying to get your money are always looking for new ways to reach people. And they'll use whatever they know about you to target their pitch, ”said Rosario Méndez, a part of the agency's Division of Consumer and Business Education, in a blog post.
Besides being wary of the content and people you interact with on social media, there are some other good practices you can adopt. Some recommendations from the FTC include limiting who can see your posts and information on social media, opting out of targeting advertising if possible, and calling friends who ask you for money on social media to confirm it's really them.
If you do fall prey to a social media scam, do not panic. There are ways for you to possibly get your money back. To be safe though, steer clear of investing, romance, and shopping at companies you've never heard of before.