Americans Have Lost Billions in Social Media Scams: Federal Trade Commission

Social media has proved to be a “golden goose for scammers,” the Federal Trade Commission said in a new report.

That’s because it's so easy for scammers to prey on people through social media, the agency noted.

One in four people who reported being scammed out of money since 2021 said the swindle started on social media, the FTC revealed. Reported losses mounted to $2.7 billion. 

“And because the vast majority of frauds are not reported, this figure reflects just a small fraction of the public harm,” officials said.  

Scammers can easily manipulate victims on social media by posing as friends or loved ones — or by hacking into an account. They can track accounts to observe behavior on social media, and then tailor their approach to a target, officials warned.

Scammers can also place targeted ads based on the interests, age and past purchases of a "mark."

“All of this costs them next to nothing to reach billions of people from anywhere in the world,” noted the FTC report.

Scammers defraud people of all ages, but the FTC found that “the numbers are most striking for younger people.”

In reports of money lost to fraud by people ages 20 to 29 in the first half of 2023, social media was the contact method 38% of the time, the FTC determined.

That figure grew to 47% for victims ages 18 and 19. 

The most frequently reported fraud loss so far this year involved people who attempted to purchase something marketed on social media — such as clothing or electronics. Scammers predominantly deployed Instagram and Facebook ads to lure victims in those scams, according to the FTC. 

The largest share of losses were linked to scams that utilized social media to promote fake investment opportunities, the FTC found.

The scammers often promoted their own reported investment success to entice others to invest. Those who "invested" often received nothing.

Romance scams are another common way swindlers prey on social media users.

The ruse starts by "love bombing" a taget, then hitting them up with requests for money.

Here are some tips from the FTC to avoid social media scams: