The Federal Trade Commission calls social media “a Golden Goose” for scammers. According to a recent report, consumers have lost a staggering $2.7 billion, no that is not a typo. Most suspect that this figure is low, because many consumers who are defrauded on social media do not report it. Here’s what the FTC has to say about social media scams and how to avoid them.
Who is being scammed on social media?
According to the FTC, one in four people who reported losing money to fraud, say it started on social media. Social media scams are a problem for people of any age, but you might be surprised that younger people (18-39) lose up to two times more money than older people. This might be because younger people are more likely to report the loss, or that they are more likely to fall for fraud because they are more trusting on social media, having grown up with these platforms.
Common scams on social media
Fraud losses occur in many different ways, but the FTC reports about 44% of these losses are due to undelivered goods, especially electronics and clothes. Online shopping scams are probably the most prominent types of fraud on social media. Scammers have an edge on social media, because they can create fake profiles at no cost, then use their profile to tailor their approach. They make pretend to be you to con your friends, or they may con you based on what you share.
Interestingly, online shopping scams are most reported, but investment scams are the largest dollar losses.
Avoid scams on social media
The FTC provides a list of things you can to prevent being defrauded on social media:
- If you get a money request on social media in your messages, do not send any money. (Personally, I would recommend not using social media to send any money even when you’re sure it’s going to a friend.) Contact your friend another way to ask if it’s really them. Scammers will ask you to pay by gift card or with cryptocurrency, too. DO NOT PAY.
- Use your privacy settings to limit who can see your posts and social media information. Don’t accept requests from people you don’t know, even if they are connected to other friends.
- Do not send money to people you don’t know. No matter how smooth-talking or desperate they are.
- Before you buy anything, check out the company. Google the company name and scam. Be wary of prices that are too good to be true. Don’t fill out any form until you’ve checked out the business.
Bottom line – Be suspicious on social media. Be selective in sharing information or accepting friends on social media. Report scams to the FTC here.