Social media scams hit an all-time high last year, new figures from the Federal Trade Commission (FTC) have revealed.
The FTC claims a quarter of all fraud losses for the year happened on social media, with victims losing around $770 million during 2021 (at an average of around $460 per scam) - an 18x rise on the $42 million lost just five years ago.
Although it was previously the older population that was gullible and easily defrauded, now it seems as this tide is shifting, with consumers aged 18-39 reported 2.4 times more fraud than those aged 40+.
Investment fraud and cryptocurrencies
Of all the different methods scammers are using, two are emerging as most popular - romance, and investing.
When it comes to romance scams, the premise is simple - the victim will first be approached (by a person with a false identity, either on Facebook or Instagram) with a friend request or a follow, after which the attacker will engage in seemingly innocent conversation. One thing will lead to another, and the attacker will start asking for money.
Investment fraud is a bit more elaborate. While the platforms are the same, the methods of approach may vary. In some cases, people will come across ads promoting different “investment opportunities”, or will get approached by people advertising these things. More than half (54%) of the investment scams in 2021 took off from social media.
The proliferation of cryptocurrencies only made investment scams more dangerous. The simplicity with which people are now able to send their money, often without third-party oversight, has made it an ideal channel for fraudsters. Last year, cryptocurrencies were the preferred method of payment in almost two-thirds (64%) of all social media investment scams.
The FTC’s full report, with a more detailed breakdown of social media (and other) fraud, can be found on this link.
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Sead is a seasoned freelance journalist based in Sarajevo, Bosnia and Herzegovina. He writes about IT (cloud, IoT, 5G, VPN) and cybersecurity (ransomware, data breaches, laws and regulations). In his career, spanning more than a decade, he’s written for numerous media outlets, including Al Jazeera Balkans. He’s also held several modules on content writing for Represent Communications.