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Social media a gold mine for Scammers



Social media has seamlessly integrated into the fabric of our lives, serving as a means to connect, socialize, shop, and entertain. However, the Federal Trade Commission (FTC) has revealed a concerning trend - social media is increasingly becoming a hotbed for scams and fraudulent activities. Astonishingly, more than a quarter of individuals who fell victim to fraud in 2021 reported that it all began with an advertisement, a post, or a message on a social media platform [1].


The data paints a grim picture, indicating that scammers found unparalleled success on social media in 2021 compared to any other avenue. Startlingly, over 95,000 individuals disclosed losses totaling around $770 million due to fraud initiated through social media channels during that year [3]. These losses make up approximately 25% of all reported fraud losses for 2021, marking an astounding eighteenfold surge in comparison to losses reported in 2017. Though the spike in reports spans across all age groups, individuals between the ages of 18 and 39 were disproportionately affected, with more than double the likelihood of losing money to these scams in 2021 compared to older demographics.


Social media serves as a goldmine for scammers, offering a cost-effective approach to reach billions of people across the globe. Creating counterfeit identities is a breeze, and scammers can even hijack existing profiles to dupe unsuspecting "friends." Additionally, scammers exploit the wealth of personal information shared on these platforms to tailor their tactics with precision. The tools accessible to advertisers on social media platforms enable scammers to systematically target individuals with deceptive advertisements based on details like age, interests, and previous purchases. Unsurprisingly, investment scams, particularly those involving fabricated cryptocurrency ventures, have emerged as a key focus for scammers, marked by a substantial surge in reports [5]. More than half of those who reported losses to investment scams in 2021 indicated that the scam originated on social media [6]. Reports confirm that scammers utilize social media platforms to peddle phony investment opportunities and even establish connections with individuals under the guise of friendship to coerce them into investing. Despite promises of substantial returns, victims often find themselves empty-handed [7].


Following investment scams, romance scams take the runner-up position in terms of profitability on social media. Losses due to romance scams have skyrocketed in recent years, with over a third of victims attributing the onset of the scam to Facebook or Instagram [8]. These scams usually commence with seemingly innocuous friend requests from strangers, followed by charming conversations that eventually lead to solicitations for money [9].


Though investment and romance scams lead the pack in terms of monetary losses, a significant number of reports involve individuals falling prey to online shopping scams advertised on social media [10]. Surprisingly, 45% of reported losses in social media-related scams in 2021 were associated with online shopping. Nearly 70% of these cases involved individuals placing orders, typically after encountering advertisements, only to be left without the promised merchandise. Instances of fake ads mimicking legitimate online retailers, diverting individuals to counterfeit websites, were also noted. Among those who identified specific social media platforms in their reports of undelivered goods, Facebook and Instagram were predominant.


When combined, investment scams, romance scams, and online shopping fraud comprised over 70% of reported losses in social media scams for 2021. Nevertheless, social media harbors a diverse array of fraudulent activities, with new schemes continually emerging. To help safeguard yourself and your family while using social media, consider these precautionary measures:


1. **Adjust Privacy Settings**: Regularly review and adjust your privacy settings on social media platforms to limit the exposure of your posts and personal information.


2. **Opt-Out of Targeted Advertising**: Explore the option to opt out of targeted advertising where available on various platforms.


3. **Verification**: If a friend sends you a message urging urgent monetary assistance, consider reaching out to them via phone before taking any action. Their account may have been compromised, especially if they request payment through unconventional means such as cryptocurrency, gift cards, or wire transfers.


4. **Exercise Caution in New Connections**: If an individual on social media hastily pushes for friendship or romance, exercise caution. Familiarize yourself with the tactics of romance scams and never send money to someone you haven't met face-to-face.


5. **Research Before Purchase**: Prior to making online purchases, research the company extensively by searching their name along with terms like "scam" or "complaint" to ensure their legitimacy.


For comprehensive guidance on identifying, evading, and reporting scams - as well as steps for recovering funds if you've been scammed - visit ftc.gov/scams. Should you come across a scam, promptly report it to the FTC at ReportFraud.ftc.gov.

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