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Fraud victims lost $2.7bn to scammers operating on social media between January 2021 and June 2023, according to new research from the FTC.
The consumer protection agency said the sum of money lost to fraud on sites like Instagram and Facebook dwarfed that lost via regular websites and apps ($2bn), phone calls ($1.9bn) and email ($900m).
Most common on social media were reports of online shopping scams (44%) – particularly clothing and electronics that were purchased but never arrived. Investment (20%) and romance fraud (6%) were also common during the period.
However, in terms of money lost, investment fraud (53%) dominated, followed by romance scams (14%) and online shopping fraud (8%).
“To draw people in, these scammers promote their own supposed investment success, often trying to lure people to investment websites and apps that turn out to be bogus,” wrote FTC senior data researcher, Emma Fletcher.
“They make promises of huge returns, and even make it look like an ‘investment’ is growing. But if people invest, and reports say it’s usually in cryptocurrency, they end up empty handed.”
Read more on scams: Scam Page Volumes Surge 304% Annually
According to the FTC report, people of all ages are impacted by social media scams, but especially younger internet users.
“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% of the time. For people 18-19, that figure was 47%. The numbers decrease with age, consistent with generational differences in social media use,” explained Fletcher.
The FTC recommended users to:
- Limit profile posts and information by revisiting privacy settings to set some restrictions
- Always call back any friend who messages online to ask for money, especially if they want to be paid via cryptocurrency, gift card or wire transfer
- Never send money to someone they’ve never met, and to be aware of romance scams
- Always research a company before buying from them, including searching for its name plus “scam” or “complaint”
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