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A report by the FTC warns that the total figure for losses is likely higher as the ‘vast majority’ of frauds are not reported.
A new report claims scammers on social media platforms have stolen $2.7bn from people in the US since 2021, which is more than “any other contact method”.
That’s according to the Federal Trade Commission (FTC), which claims one in four people in the US who reported losing money to fraud since 2021 said it began on social media. The FTC also said the total figure for losses is likely far higher as the “vast majority” of frauds are not reported.
The commission’s report claims these scams are a problem for people of all ages, but the largest impact is on younger people. In the first half of 2023, fraud reports by people aged between 20 and 29 listed social media as the contact method more than 38pc of the time. This percentage grew to 47pc for people aged between 18 and 19.
“Social media gives scammers an edge in several ways,” the FTC said. “They can easily manufacture a fake persona or hack into your profile, pretend to be you and con your friends. All of this costs them next to nothing to reach billions of people from anywhere in the world.”
The most common form of fraud came from online shopping scams, when people attempted to buy something that was advertised on social media. This type of scam represented 44pc of all social media fraud reports in the first half of 2023.
Despite this, the FTC said the largest monetary losses came from scams that use social media to promote “fake investment opportunities”. These scams represent 20pc of social media fraud reports, but accounted for 53pc of the total monetary losses.
“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,” the FTC said. “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,” the FTC said.
The commission recommends that social media users read about certain scams, limit who can see their information on social media and call friends if they send a message about an “opportunity or an urgent need for money”.
“Their account may have been hacked – especially if they ask you to pay by cryptocurrency, gift card or wire transfer,” the FTC said. “That’s how scammers ask you to pay.”
Last month, Wasim Khaled of Blackbird.AI discussed the threat that AI poses in creating deep fakes and misleading content, for the purpose of scams and spreading disinformation.
In July, a report by NordLayer claimed fake job offers and phishing attempts are the top forms of fraud used against businesses on LinkedIn.
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