FTC: Please stop falling for social media scams, you've given crooks at least $650M so far this year

Social media posts hyping products and investment opportunities that sound too good to be true … probably are, the FTC would like you to know.

In fact, according to the US government watchdog, since 2021 people have lost more than $2.7 billion from fraud pushed via social networks. Social media is the number one method for scammers to contact their victims, FTC data shows. 

The most frequently reported rackets on social media during the first half of 2023 related to online shopping swindles, specifically clothing and electronics, which accounted for 44 percent, or 24,640, of reported incidents. These usually involve someone buying something advertised on Facebook, Instagram or Snapchat, and then never receiving the product.

While online shopping fraud is the most common issue, people are losing more money from social-media schemes promoting phony investment opportunities and romance cons, according to the FTC's totals from January to June.

"A typical modus operandi may involve money-making promotions for purported investment opportunities, often using cryptocurrency as the hook," the FTC's Data Spotlight indicated. "Scammers lure people to websites or apps with their own supposed 'success stories,' but consumers ultimately end up empty-handed and with empty wallets."

Total losses reported during this six-month period totaled $658 million, of which 8 percent were due to online shopping trickery, 53 percent were related to investment scams, 14 percent romance bait, and 27 percent classified as "other."

It's worth noting that most online fraud is never reported, so in reality all of these numbers are much higher. As the FTC says, these figures "reflect just a small fraction of the public harm." In more than half the investment-scam reports, netizens paid criminals using cryptocurrency.

Plus, younger people seem to be falling for social-media fraud more than older folks, or at least reporting it. The watchdog claimed: "In the first six months of 2023, in reports of money lost to fraud by people 20-29, social media was the contact method more than 38 percent of the time. For people 18-19, that figure was 47 percent.

"The numbers decrease with age, consistent with generational differences in social media use."

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While these crimes typically target individuals, businesses should also be concerned about scammers' use of social media advertising. "No reputable retailer wants its marketing messages tarnished by the proximity to fraud," the FTC says.

The consumer protection agency also offers some tips on how to prevent becoming online crooks' next victim, including setting your social media account to private, or at least limiting who can see your posts. 

Also: don't believe messages from a "friend" claiming to need money and asking you to pay with crypto or gift cards. There's a very high likelihood that this message is fake or possibly that their account has been taken over.

Same goes for online romances — especially with super-hot individuals who never seem to be able to meet up in person but suddenly need cash to pay for their elderly grandparents' medical bills or flight costs to meet their supposed partners to be. 

Around Valentine's Day, the FTC highlighted these types of cons alone, reporting that romance scams cost victims at least $1.3 billion in 2022. Almost 70,000 people reported these crimes last year with the median loss coming in around $4,400, and they're only the ones that admitted it. ®