Social media is a goldmine for scammers, and in our latest FTC data spotlight, we’re digging deeper into this trend of deception happening on social media platforms.
Why do we repeatedly ask people to file reports at ReportFraud.ftc.gov to notify us when they see suspicious behavior? Because—among other things—enforcement members of the Federal Trade Commission and the Consumer Sentinel Network use this information to detect, track, and ultimately challenge illegal conduct. The Federal Trade Commission’s latest data spotlight documents a troubling trend in which the proportion of consumers who report scams have been exposed to the perpetrators on social media.
In 2021, more than 95,000 people reported that scams initiated on social media platforms resulted in approximately $770 million in losses. These losses accounted for approximately 25% of all fraud losses reported that year. Compare these numbers to the losses reported on social media platforms in 2017, which represents an 18-fold increase.
Here are some additional facts to consider:
- Who is being blackmailed? Probably not the person you think. Reports will increase across every age group, but in 2021, those aged 18 to 39 are more than twice as likely as older adults to report losing money to scams initiated by social media.
- Deceptive advertising causes significant harm to consumers. Of the reports we received about fraud losses due to social media connections, 45% said they had been scammed when purchasing something sold on social media. About 70% of these reports involved items that consumers ordered but never received. Some people have reported ads on social media that mimic the look of well-known online retailers.
- Investment scams cause huge amounts of money to be lost, and one payment method has become a favorite among scammers. Investment scams accounted for 18% of the fraud reports we received on social media platforms, but accounted for 37% of total dollar losses. When people specified payment methods for investment scams, 64% of reports were cryptocurrencies. (This should come as no surprise to anyone who read the FTC’s May 2021 Cryptocurrency Scam Spotlight.)
Why should these statistics concern businesses? First, because when we say “consumer,” we’re talking about your family, your employees, the people in your community, and yourself. Secondly, the increase in reports of scams traced to ads on social media should be of concern to companies that use these platforms to promote their products honestly. Will consumers who have lost money due to ad scams on social media think twice before opening their wallets again?
Read the latest FTC data spotlight and view more spotlight This sheds light on other trends consumers are telling us. Have you discovered questionable business practices?Let us hear from you reportfraud.ftc.gov.
