More than 95,000 Americans were bilked over social media in 2021 resulting in losses approaching $1 billion.
Be careful about lending that attractive new Facebook friend or Instagram follower money, the Federal Trade Commission warned this week.
According to an FTC report, American consumers lost about $770 million to fraud schemes originating on social media in 2021, an 18-fold increase over money lost over social media in 2017. The “massive surge” of fraud originating on social platforms is being driven chiefly by investment scams involving cryptocurrency and “romance scams," the agency warned.
“Losses to romance scams have climbed to record highs in recent years. 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 friend request from a stranger, followed by sweet talk, and then, inevitably, a request for money.”
While romance scams accounted for only 9% of total reports to the FTC, they were the most cost-effective for fraudsters, accounting for 24% of all money lost to fraud over 2021, or about $190 million.
Investment scams accounted for 37% of all losses, while the most common report originated from Americans trying to buy something marketed or for sale on social media. In total, 45% of all reports of money lost to social media were related to online shopping, according to the report.
The FTC, an independent agency responsible for enforcing antitrust measures and promoting consumer protections, said the $770 million lost via social platforms accounted for one fourth of all Americans’ fraud losses in 2021.
In five years, the number of specific reports to the FTC of fraud originating on social media grew from 5,000 in 2017 to 95,000 in 2021 while the total monetary value lost through those fraud efforts rose from $42 million to $770 million.
“For scammers, there’s a lot to like about social media. It’s a low-cost way to reach billions of people from anywhere in the world. It’s easy to manufacture a fake persona, or scammers can hack into an existing profile to get ‘friends’ to con,” the FTC said.