Social media platforms have become a goldmine for scams and fraud, according to a new in-depth report from the Federal Trade Commission (FTC).
An Oct. 6 FTC report reveals social media tools provide the perfect environment for scammers to target unsuspecting users. One in four people reporting fraud losses since 2021 indicated the scam originated on social media.
The total losses from these social media scams hit a staggering $2.7 billion, exponentially higher than any other contact method used by fraudsters. This massive figure likely only scratches the surface, as the vast majority of fraud goes unreported.
The report details how social media gives scammers key advantages.
They can easily create fake profiles or hack real accounts to pose as friends and family. Platforms allow them to gather intel from users’ posts and profiles to tailor their tactics. Powerful advertising tools permit pinpoint targeting of potential victims based on age, location, interests, and more. And they can reach billions worldwide at little to no cost.
While all age groups are targeted, the data shows that younger adults with the highest social media use is most at risk. For 18-19 year olds, nearly 50% of fraud loss reports indicated social media as the starting point. That number remains over 35% for users in their 20s.
Online shopping scams through fake social media ads make up the bulk of reported incidents, representing 44% of losses. Scammers lure victims with deals on hot products and never deliver after payment. Facebook and Instagram hosted most of these fraudulent ads. Another hot scam deal is filling one order for the customer and then continuing to charge the customer’s credit card in the following months.
But while shopping scams were most frequent, investment frauds accounted for the highest financial damages. Over 50% of dollars lost in the first six months of 2023 came from fake investment opportunities, typically involving cryptocurrencies. Romance scams ranked second in total losses.
To avoid becoming a victim, experts recommend being cautious of rushed online relationships, limiting publicly shared information, and carefully verifying people, companies, and investment offers before providing money or personal details.
The FTC report demonstrates social media’s dark underbelly. Behind the friendly faces and helpful connections lies a shady world of deception. Users would be wise to approach these platforms with skepticism rather than blind trust.
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