The Federal Trade Commission (FTC) recently released data showing that more than 95,000 consumers reported losses totaling $770 million from fraud schemes that started on social media. That is a staggering amount of money lost by consumers and is a significant increase from losses of $258 million reported in 2020.
According to the FTC, the increase is somewhat explained by record losses to cryptocurrency scams. Cryptocurrency scams accounted for 37 percent of all reported fraud losses that originated on social media.
But the vast majority of fraud scams – almost 70 percent of those reported – were online shopping scams in which consumers placed an order online after seeing an ad but never got what they ordered. According to the FTC, “Some reports even described ads that impersonated real online retailers that drove people to lookalike websites.” Nine out of 10 reports from consumers who had been scammed said the source of the undelivered merchandise was Facebook or Instagram.
Romance scams and gift card scams continued to be a problem too.
What is particularly interesting about the data is that consumers between the ages of 18 and 39 were twice as likely to report losing money from a social media scheme than those of us who are older. Perhaps we are just a bit more wary in our old age. Whatever age you are, beware of social media fraud scams and check out the FTC’s Data Spotlight.