The Federal Trade Commission (FTC) warns consumers to keep an eye out for who they interact with on social media since scams are rising.
This week, a new FTC report showcases just how bad social media scams became in 2021. According to the FTC, more than one in four people who lost money to fraud in 2021 said it started on social media in the form of an ad, post, or message. Findings also show that social media was more profitable to scammers last year than any other method of reaching people.
"More than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021," the FTC said. "Those losses account for about 25% of all reported losses to fraud in 2021 and represent a stunning eighteen fold increase over 2017 reported losses. Reports are up for every age group, but people 18 to 39 were more than twice as likely as older adults to report losing money to these scams in 2021."
Social media's popularity with scammers is thanks to the easy ways anyone can make a fake profile or hack into an existing profile and its overall low cost. The FTC said that scammers targeting people use their victims' profiles to find out their habits, likes, and other personal details to cater directly to them.
Also: Cryptocurrency scams pose largest threat to investors
The top scams identified include investment, romance, and online shopping scams. However, investment scams account for the most reported total losses.
"More than half of people who reported losses to investment scams in 2021 said the scam started on social media. Reports to the FTC 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," the FTC added. "People send money, often cryptocurrency, on promises of huge returns, but end up empty-handed.".
Overall, cryptocurrency scams are significantly up in the US and are considered the number one threat for investors in 2022, according to a recent report from the North American Securities Administrators Association (NASAA). Especially since platforms like Facebook have added the option to use crypto for transactions, it's essential to keep potential scams in mind before sending anything to anyone.
The FTC cautions social media users to practice better habits when scrolling their social feeds. Simple ways to reduce the risk of social media scams include limiting who sees your posts and information by setting up privacy controls, opting out of targeted advertising, and checking out any company you find on social media before buying from them.