According to the US Federal Trade Commission (FTC), Americans lost $2.7 billion to social media scams, more than website, phone call, email, text, or pop-up ad scams. In a new report, the FTC details how scammers target people on social media and what kind of scams result in the most significant financial losses.
The FTC states that from January 2023 to June 2023, social media users were victims of fraudulent online shopping purchases (44%), fake investment opportunities (20%), and romance scams (6%).
However, fake investment opportunities accounted for 53% of the $658 million lost by Americans to scams from January to June. Younger people are more likely to be victims of social media scams, as 47% of 18 to 19-year-olds were scammed on social media.
Here’s what you need to know to avoid social media scams.
Fraudulent online shopping purchases
Scammers are successful at targeting people on social media with retail scams. Usually, people buy items that are never delivered, and the FTC says clothing items and electronics are high on the list of no-shows.
The average person loses about $100 to retail scams. Of the people who reported which social media site they were scammed on, 60% occurred on Facebook, while 24% occurred on Instagram.
These kinds of scams often originate from Instagram and Facebook ads. To avoid these scams, the FTC suggests you search the company’s name plus “complaint” or “scam” to see other people’s experiences.
If you’re worried you sent money to a scammer, the FTC offers tips to help you try to recover your money and better protect yourself next time.
Fake investment opportunities
More than half of all money lost to social media scams from January to June went to fraudulent investing opportunities. Most investment scammers build up their social media accounts to seem like they’re wealthy and can offer sound financial advice.
These kinds of scammers usually offer courses or classes that promise to help others quickly get rich with huge returns. On average, victims lost $3,000 to fake investment scams.
People reported fraudulent investment opportunities on Instagram (30%), Facebook (26%), WhatsApp (13%), and Telegram (9%).
Romance scams have been an avenue for scammers for decades. They usually contact people with a friend request and aim to build a relationship with the victim. The FTC says romance scammers quickly start love-bombing their victims by showering them with compliments and affection early on.
However, scammers don’t do these acts with kindness in mind but to take money from a victim. Soon after they hook their victims, romance scammers will request money with a high sense of urgency.
Romance scammers will avoid meeting in person or video calling and will tell their victims to send money via wire transfer, gift cards, and money transfer apps. These methods of sending money give scammers money quickly and make it hard for victims to get their money back.
If you think a romance scammer has scammed you, the FTC has a guide to help you report this fraud and avoid it in the future.