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ONLINE SCAMS
Huge increase in online fraud, with social media ads a big culprit
By our News Team | 2022
Fraud initiated on social media has shown a remarkable 18-fold increase in the past four years, US consumer watchdog’s latest figures show.
More than one in four people in the US who reported losing money to fraud in 2021 said it started on social media with an advertisement, a post, or a message.
This is according to the Federal Trade Commission (FTC), the government body mandated with protecting America’s consumers.
“In fact, the data suggest that social media was far more profitable to scammers in 2021 than any other method of reaching people,” the FTC says in a statement published on its website.
More than 95,000 people reported about US$770-million in losses to fraud initiated on social media platforms in 2021, a stunning eighteen-fold increase over 2017 reported losses. Reports are up for every age group, but Americans aged 18 to 39 were more than twice as likely as older adults to report losing money to these scams last year.
Photo by Mikhail Nilov from Pexels
For scammers, there’s a lot to like about social media. It’s a low-cost way to reach billions of people from anywhere in the world. It’s easy to manufacture a fake persona, or scammers can hack into an existing profile to get ‘friends’ to con.
Scammers use tools available to online advertisers
There’s also the ability to fine-tune their approach by studying the personal details people share on social media.
“In fact, scammers could easily use 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,” the FTC warns.
Reports to the organisation show scammers use social media platforms to promote bogus investment opportunities, and even to connect with people directly – as supposed ‘friends’ – to encourage them to invest. People send money, often cryptocurrency, on promises of huge returns, but end up empty handed.[7]
After investment scams, FTC data point to romance scams as the second most profitable fraud on social media. Losses to romance scams have climbed to record highs in recent years. More than a third of people who said they lost money to an online romance scam in 2021 said it began on Facebook or Instagram. These scams often start with a seemingly innocent friend request from a stranger, followed by sweet talk, and then, inevitably, a request for money.
“Together, investment scams, romance scams and online shopping fraud accounted for over 70% of reported losses to social media scams in 2021. But there are many other frauds on social media too, and new ones popping up all the time,” the FTC stated.
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