Scams originating from social media have dramatically risen in the last few years. In 2021, more than 95,000 people reported losses of about $770 million just from social media scams. This accounts for approximately 25% of all reported fraud losses for 2021. This massive loss is eight times as much as the social media scams from 2017.
Some facts to consider for these reports:
• People who are getting ripped off might not be who you think they are. Although the reports are increasing for every age group, people between 18 to 39 years old were more than twice as likely to fall victim to social media scams than older adults.
• Deceptive ads inflict substantial consumer injury. Approximately 45% of all social media scams were initiated by deceptive ads on social media. About 70% of these reports involved items purchased but never received. Some of the deceptive ads on social media were reported to masquerade as established and legitimate online retailers.
• Investment scams accounted for big money losses with one payment method emerging as a favorite among fraudsters. About 18% of all social media scams were related to investments but accounted for 37% of the total dollar losses. Out of the reports that mentioned the form of payment, cryptocurrency was used in 64% of these scams.
This is concerning as legitimate businesses advertise on social media alongside these scammers. Consumers may be deterred to trust social media advertising after falling victim to these scams.
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