The Federal Trade Commission says Americans have lost at least $2.7 billion due to social media scams since 2021, and the real figure is likely much higher due to a severe underreporting.
A recent study reveals that only 4.8% of scam victims filed complaints with the Better Business Bureau or a government agency.
“Reported losses from social media scams during the same period reached a staggering $2.7 billion, far more than any other contact method,” said Emma Fletcher, FTC senior data investigator.
“And because the vast majority of fraud goes unreported, this figure reflects only a small fraction of public harm.”
In social media scams, scammers often advertise fake products, attempting to trick potential victims into making payments. Subsequently, these criminals take the money without fulfilling their promise.
Alternatively, they could lure people with false investment opportunities, often related to cryptocurrencies. Another tactic is to send unexpected friend requests, posing as romantic prospects, and then request money from their targets.
The FTC today advised American consumers to exercise caution and protect themselves against such scams, encouraging at-risk individuals to restrict their social media posts and contacts by contacting them directly by phone if someone, even a supposed friend or family member, requests money through social networks.
Americans were also urged to be careful if someone on social media promotes friendship or romance out of the blue. In such cases, it is recommended to exercise caution, read about romance scams, and refrain from sending money to people you do not know in person.
Additionally, consumers should thoroughly research companies before making purchases, as online searches using a company name and keywords such as “scam” or “complaint” can provide valuable information.
”Reports during the first half of the year show that the most frequently reported scams on social media are related to online purchases, with 44 percent of reports pointing to fraud related to the purchase or sale of products online “the FTC said.
“The majority of these reports come from people who never received the items they ordered after responding to an ad on Facebook or Instagram.”
Today’s warning follows an FTC report on a spike in social media fraud during 2021, when Americans lost more than $770 million in a single year, based on more than 95,000 reports.
This represented a whopping 18-fold increase over 2017 losses and more than double compared to those reported during 2020.
In February, the FTC said American consumers lost a record $8.8 billion due to various types of scams in 2022, after a massive more than 30% increase in fraud losses compared to the previous year.
At the time, the agency revealed that approximately 2.4 million Americans reported financial losses due to scams last year, and the majority fell victim to imposter and online shopping scams in 2022.