Scams that started on Facebook, Instagram and other social media sites doubled year-over-year in 2021, leading to $770 million in consumer losses, a federal agency warns.
Calling social media a “gold mine” for scammers, the Federal Trade Commission (FTC) says these platforms were far more profitable than any other method of reaching consumers for scams. Those who lost money on social media were primarily victims of three kinds of scams.
- Investment scams. There was a “massive surge” in bogus deals for cryptocurrency in 2021.
- Romance scams.
- Online shopping scams in which consumers ordered a product that was marketed on a social media site, but it never showed up.
The more than 95,000 such consumer complaints made last year were twice the number made in 2020, the FTC says, and the dollars lost last year were an 18-fold increase from 2017.
Social media sites offer “a low-cost way to reach billions of people from anywhere in the world,” Emma Fletcher, an FTC data researcher, wrote in an advisory. Scammers can easily manufacture a fake persona or hack into a person’s profile page to find other victims, she said.
Before striking, crooks vet victims
Bad actors can “fine-tune their approach by studying the personal details people share on social media,” Fletcher added, using “the tools available to advertisers on social media platforms to systematically target people with bogus ads based on personal details such as their age, interests or past purchases.”
While reports were up among all age groups, consumers ages 18 to 39 were more than twice as likely as those ages 40 and older to report losing money to social media-induced scams, the FTC says.
Reports of consumer fraud originating on social media sites soared in 2021.
There were 95,000 reports and consumer losses of $770 million, with investment, romance and online shopping scams topping the list.