WASHINGTON D.C.: A report from the Federal Trade Commission published this week called social media a “gold mine for scammers.”
According to the Federal Trade Commission, social media scams have increased at an alarming rate over the last five years, accounting for some $770 million in reported losses just in 2021, an eighteen-fold increase from 2017, which saw $42 million in reported losses.
The Federal Trade Commission received more than 95,000 reports of fraud initiated on social media last year across a variety of categories, including investment scams, romance scams, and online shopping scams.
Investment scams, making up 37 percent of the frauds, and romance scams, 24 percent of all complaints, were reported to be the most profitable for fraudsters.
In investment scams, criminals reach out to users on social media with bogus investment opportunities promising big returns, even pretending to be the victim’s friends to get them to send money.
Also, thefts involving cryptocurrency have surged, given its boom in popularity.
Meanwhile, romance scams are increasingly prevalent.
“More than a third of people who said they lost money to an online romance scam in 2021 said it began on Facebook or Instagram,” the FTC reports. “These scams often start with a seemingly innocent friendly request from a stranger, followed by sweet talk, and then, inevitably, a request for money.”
Online shopping was a rising scam category in the agency’s report. While not as profitable as other types of scams, it has become the fraud most reported to the FTC, making up 45 percent of loss reports. Victims of these scams bought something on social media-Facebook and Instagram were the platforms most cited-but never received their purchases.