In its latest Consumer Protection Data Spotlight, the Federal Trade Commission (FTC) says 2021 was a banner year for social media scammers, with $770 million in social-media–originated fraud losses reported to the agency. The more than 95,000 people who reported losing money to social-media–related fraud represent more than 25% of all fraud loss last year, according to the FTC.
Investment and romance scams cost consumers more money, but the largest number of reports came from people who said they were scammed when trying to buy something online.
These losses represent a stunning 1800% increase over similar type losses reported in 2017. Although there were increases in every age group, people 18 to 39 were 2.4 times as likely as older adults to report losing money to social media scams in 2021.
Key Takeaways
- FTC says consumers reported $770 million in social media scam fraud in 2021.
- Last year’s losses represent an 1,800% increase over the past four years.
- According to the FTC, just 4.8% of fraud victims report losses to a government agency or the BBB.
- More money was lost to social media investment scams, but the greatest number of reports were about undelivered goods.
- People 18 to 39 were more than twice as likely as older adults to report these type of losses.
- Protecting yourself from social media scams requires vigilance. If something seems too good to be true. It probably is.
Stunning Statistics
The 1,800% rise in social media fraud losses over the past four years alone is a staggering statistic. Combine that with some of the other data from the FTC report and it’s clear that this problem deserves a great deal more attention than it is receiving. Consider, for example:
- 95,000 people—more than twice the number in 2020—reported losing money to social media fraud in 2021.
- $770 million in social media fraud losses reported in 2021 represents 26% of all fraud losses reported last year.
- 70% of reported social media losses came from investment scams, romance scams, and online shopping fraud in 2021.
- Just 4.8% of fraud victims report losses according to the FTC.
Facebook and Instagram were the two most frequently mentioned platforms used for nearly all types of social media scams in 2021.
Losses by Category
In terms of the amount of money lost, investment scams topped the FTC list. The majority of these scams involved bogus cryptocurrency investments. Not only that but, unsurprisingly, the preferred method of payment for criminals waging investment scams was—you guessed it—cryptocurrency.
After investment scams, romance scams are the second most profitable types of fraud on social media. More than 33% of people who said they lost money to an online romance scam in 2021 said it began on Facebook or Instagram. Romance scams may start as a friend request from a stranger that quickly turns romantic. In no time, there will be a request for money.
The largest number of reports came from online shopping scams. Most of those scams involved someone ordering a product they saw on social media only to have the product never arrive. As with other types of scams, the most frequently mentioned social media platforms for undelivered products were Facebook and Instagram.
Investment, romance, and online shopping fraud accounted for more than 70% of reported losses to social media scams in 2021. That leaves almost 30% for all other types of social media scams, including new ones that are popping up now.
Why Scammers Love Social Media
If you’re a scammer, there’s a lot to love about social media. First, it’s cheap—as in almost free. You can reach billions of people all over the world, and you can adopt a fake personality that the average person will likely not be able to penetrate. Many scammers actually hack into existing identities and scam friends of those people.
Scammers often take an almost advertiser-like approach to their scams, studying details of potential victims’ personalities and habits. Most people happily share their age, interests, and even past purchases online. If they don’t, social media algorithms do the work for them.
If you spot a scam, report it to the FTC at ReportFraud.ftc.gov.
How to Protect Yourself
Vigilance is important if you want to avoid being scammed on social media. The FTC suggests the following steps:
- Limit who can see your posts and information on social media by adjusting your privacy settings to a comfort level you prefer.
- Opt out of targeted advertising if the platform you are on allows it.
- Messages, even from friends, that promote investing opportunities or an urgent need for money should be viewed skeptically. The simple solution is to call the friend and ask if they sent the message.
- If you are asked to pay for anything with cryptocurrency, a gift card, or wire transfer, be very cautious. These are scammers’ favorite payment methods.
- A social media friend request that seems rushed or quickly becomes romantic should give you pause. If it includes a request for money, run away.
- Before you buy through social media, check out the company. Search online for its name using keywords like “scam” or “complaint.”
