The latest study from the FTC (Federal Trade Commission) has shocked the world, with consumers exposing social media as the next top target of fraud. In 2021, according to the most recent Data Spotlight report for consumer protection, scam artists cheated approximately 100,000 people via social media. A rise of more than twofold over the previous year.
This article includes a comprehensive overview of the study, as well as the most common frauds and social media platforms that scammers use to defraud you of your money. It also points out what you can do to avoid such scammers and stay safe while sharing your life and scrolling through social media moving forward.
FTC Discovery: Summary of Findings
Here are the findings of FTC in a nutshell.
- Losses: The total amount of money reported to have been lost due to fraud in 2021 is $770 million.
- Target Age: Individuals between 18 to 39 were the most targeted.
- Targeted Social Media: People on Facebook and Instagram are the primary targets for shopping fraud.
- Role of Social Apps: 25% of all financial losses in 2021 baited people using social media.
- Consumers Affected: Over 95,000 consumers reported losses on social media in 2021.
- Scams Involved: 45% of losses are attributed to online shopping fraud, 18% to investment scams, and 9% to romance scams.
- Percentage of Fraudulent Shopping: 70% of online shopping fraud included advertisements for products that never arrived after ordering.
Social Media Scams
Scams on social media are rising, and the FTC’s study clarifies that you should be aware of and cautious about them. Scams on social media are deceptive schemes that use the platform to lure you and steal your money and critical personal information. Many scams use fake social media profiles or businesses, making it necessary for users to be acquainted with those schemes.
While using social media, you may come across fake accounts, adverts, and click baits that link to phishing pages. Individuals who create bogus profiles for catfishing or romance entice you into providing financial assistance or goods. Other methods include lottery scams that seek financial information, fake money-making schemes, fake products, and advertisements. The following section lists some of the most common scams that target individuals and the most probable social media apps for frauds, according to the Federal Trade Commission.
The New Goldmine: Social Media’s Top Scams
As per FTC’s Data Spotlight report, the most popular scams used to target consumers on social media are:
Online shopping scams are on the rise with social media. Applications such as Facebook and Instagram provide marketplace and business account options for selling goods and services using social media reach. However, scam artists use fake profiles and pages and post false advertisements about jewelry, clothing, electronics, vehicles, etc.
Counterfeit websites with matching products often accompany these pages. They scam you out of your finances by asking for prepaid orders or wire transfers but never ship the products and delete their profiles soon after receiving payment. It is essential to steer clear of prices that sound too good for an item, online prepaid orders, and small business profiles that look suspicious.
Catfishing and dating profiles often send you unsolicited messages to try to connect. These profiles usually try to get to know you over encrypted chat services such as WhatsApp and win your trust and care by initiating romance. Romance scammers express strong emotions to get you interested and then scam you out of your finances and personal information.
Investment scams involve individuals or profiles reaching out to you via advertisements or DMs (Direct Message), offering you low-risk, high-reward Ponzi schemes. The latest investment scams have started targeting individuals by offering long-term projects involving monthly payments and targeting their digital assets, such as cryptocurrencies. Scammers also pose as businesses or charitable entities asking you for funds and never contact you again after securing finances. Investment scams involve fake promises of guaranteed results. It would be best to avoid deals and opportunities that sound too good to be true, as they could eventually lead to you compromising your PII (Personally Identifiable Information).
Avoiding Social Media Scams
Social media scams can lead to substantial financial losses, as revealed by the FTC’s report. However, you can avoid scams if you are adequately aware. Some of the best practices for steering clear of various types of scams include the following:
Avoiding Online Shopping Frauds:
- Always purchase products from legitimate sources or websites.
- Find product reviews, customer base, and the business’s address and contact for proper legitimacy verification.
- Beware of products listed at inordinately lower prices.
- Check details and payment methods on official websites before purchasing, as scammers might provide you with a different address impersonating genuine organizations.
Avoiding Investment Scams:
- Do not invest in schemes offering high rewards with negligible risk.
- Avoid investment schemes with the promise of high returns within short durations.
- Never share critical information, such as banking or credit card details, while communicating online.
- Avoid calls from unsolicited sources and disagree if they create a sense of urgency.
Avoiding Romance Scams
- Avoid befriending strangers on social media and chat or dating websites that don’t require registration or profile verification.
- Do not divulge personal information to strangers on social media who try to get close to you.
- Never send money or gifts to help strangers on social media and avoid video calls.
- Trust your instincts if you feel uneasy and report scamming profiles.
- Only use trustworthy dating websites and avoid revealing personal numbers.
Social media may be a massive target for scammers but has become a significant part of everyone’s life and is here to stay. FTC’s report has individuals on high alert, and you should be, too. Businesses especially are at a greater risk as a single mistake of an employee could end up with a threat actor getting their hands on the organizations’ digital assets. Hence, as a business owner, it is prudent that you invest in making your workforce educated and aware of tactics threat actors use so that they can protect their privacy as well as the business’ information assets.