Do you recognize the names Kuaishou, QZone, or Sina Weibo? Maybe not, but most people around the world at least recognize most of these: Facebook, Instagram, Snapchat, Twitter, TikTok. Welcome to the growing world of social media. User numbers are astounding. Facebook alone identifies nearly two billion people accessing its “service” daily; that is almost one-quarter of the population of the planet and does not include those who only open their Facebook account five times a week. Add the other media services and I think you understand why I use the word astounding. Social media is a gold mine for scammers.
In 2021, the Federal Trade Commission reported losses of greater than three-quarters of $1 billion to social media scams; almost 100,000 victims. Those numbers are just from the FTC and don’t include what is reported to other agencies or state governments, let alone what is not reported. Online shopping and investment scams account for the majority of social media scams, along with romance scams.
Almost one-half of the scam complaints received by the FTC involved online shopping; attractive ads promoting in-demand items at low prices from brand name companies. Facebook and Instagram accounted for nearly 90% of the fraudulent ads. Criminals even used the services provided to advertisers that allow for commercial targeting based on individual habits. The ads lead to copycat websites featuring deep discounts (what fisherman wouldn’t want L.L. Bean $249 wading boots on sale for $129 with free shipping?) and favor payment with money transfer programs such as Zelle and Vemno. In the end, no product is received and the criminal profits. Four recommendations: 1) Don’t shop from social media ads; 2) Always do some homework if you are not familiar with the seller. Check with the Better Business Bureau or conduct a browser search of the company attaching the word “scam” or “complaint” to the name; 3) Don’t click the link that is provided. Enter the retailer’s name on the search line and go the official website. If there is a sale, it will show up there. Brand-name companies do not offer deep discounts to billions of social media users; 4) If you decide to take a chance and make a purchase, use a credit card and not a debit card, as credit cards offer numerous protections from fraud.
Investment scams are also growing at a rapid rate through social media. Some involve crypto currency like Bitcoin to invest in traditional categories including stocks, bonds, precious metals, petroleum exploration, and real estate. Quite often, the criminal uses social media to “friend” victims and develop a relationship with them before setting the investment trap. In 2021, the median loss in an investment scam was over $1800. Losses as high as $40,000 are common, but in most cases easily preventable.
Don’t be lured by the promise of high returns or guaranteed protection from losses. It may look great, but the promises may be too good to be true. While the offer may be tempting, step back from making investments purely on the advice of a social media “friend” and research the “opportunity.” Legitimate investments must be registered with your state, usually the Secretary of State or Department of Financial Regulation, and the brokers must also be registered. Don’t succumb to urgency or the need to transfer money by cash services such as Zelle, Venmo, or wire transfer.
Social media and chat rooms provide connection, relief from isolation, and recovery from personal loss. Social media also provides criminals with great opportunity to commit fraud and identity theft. Taking a few steps can add some protection from victimization. When dealing with social media, remember that every entry you make is being watched by someone or something (a computer). Be discreet when sharing personal information. Innocent comments about health, preferences, or family becomes ammunition for the con artist. Carefully consider any requests from strangers to “friend” you or enter your circle of contacts. You may be opening yourself up for being scammed.
Questions or concerns? Contact egreenblott@aarp.org. Elliott Greenblott is a retired educator and coordinator of the AARP Vermont Fraud Watch Network. He hosts a CATV program, Mr. Scammer, distributed by GNAT-TV in Sunderland, VT – www.gnat-tv.org.
