The Federal Trade Commission (FTC) has warned that social media posts promoting products and investment opportunities that seem too good to be true are likely to be fraudulent. According to the FTC, people have lost over $2.7 billion to scams facilitated through social networks since 2021, making social media the most popular method for scammers to target victims. The most common social media scams reported during the first half of 2023 involved online shopping fraud, particularly related to clothing and electronics. This typically involves individuals purchasing items advertised on platforms like Facebook, Instagram, or Snapchat, but never receiving the products.
While online shopping scams are the most prevalent, the FTC’s findings indicate that people are losing more money to fraudulent investment opportunities and romance scams promoted on social media. These schemes often entice victims with promises of financial gains and success stories, often involving cryptocurrency. However, victims ultimately end up empty-handed and with significant financial losses. Total reported losses during the six-month period amounted to $658 million, with 8% attributed to online shopping scams, 53% to investment scams, 14% to romance scams, and 27% falling under the category of “other.”
It is worth noting that these figures likely represent only a fraction of the actual harm caused, as most cases of online fraud go unreported. Younger individuals appear to be more susceptible to social media fraud, with social media being the primary contact method in a significant percentage of fraud reports from people aged 18-29. The FTC advises individuals to take precautions such as setting their social media accounts to private and being cautious of messages asking for money or involving online romances. Businesses should also be wary of scammers using social media advertising and the potential damage it can cause to their reputation.
