Scams on social media platforms have resulted in a staggering $2.7 billion in losses for people in the United States since 2021, making it the highest among all contact methods, according to a report by the Federal Trade Commission (FTC). The FTC also states that the actual figure may be much higher as the majority of fraud cases go unreported.
The report reveals that one in four people who reported losing money to fraud since 2021 stated that the scam originated on social media. While scams affect individuals of all age groups, younger people are particularly vulnerable. In the first half of 2023, fraud reports from individuals between the ages of 20 and 29 cited social media as the primary contact method in over 38% of cases. This percentage rose to 47% for those aged between 18 and 19.
The FTC highlights that scammers have a significant advantage on social media platforms. They can easily create fake profiles or hijack existing ones to deceive individuals and their friends. The low cost associated with reaching billions of people globally makes social media an attractive platform for scammers.
Among various types of scams, online shopping fraud emerged as the most common, representing 44% of all social media fraud reports in the first half of 2023. However, the highest monetary losses were incurred through scams that used social media to promote fake investment opportunities, accounting for 20% of fraud reports but 53% of total monetary losses. Scammers lure people by showcasing their supposed investment success and enticing them to invest in fake websites and apps. These scams primarily target cryptocurrency investors, leaving victims empty-handed.
To safeguard against social media scams, the FTC urges users to educate themselves about common fraud tactics, limit the visibility of personal information, and verify unexpected messages from friends by contacting them directly. The use of cryptocurrency, gift cards, or wire transfers as payment methods should be treated with caution.
As social media scams continue to evolve, experts warn of the potential for artificial intelligence (AI) to generate deep fakes and misleading content, facilitating further scamming and the spread of disinformation.
This report follows previously published findings that fake job offers and phishing attempts are prevalent forms of fraud on professional networking platforms like LinkedIn.
In conclusion, the FTC report highlights the alarming rise of scams on social media platforms, resulting in significant financial losses for individuals across the United States. As scammers exploit the ease and reach of social media, it is crucial for users to remain vigilant, protect their personal information, and exercise caution when engaging in online transactions or investment opportunities.