New government data shows a significant increase in losses from social media scams.
Findings released Monday (April 27) by the Federal Trade Commission (FTC) show that almost 30% of people who reported losing money in a scam last year say that the scam originated on social media.
Reported losses came to $2.1 billion, with social media scams generating far more in losses—an eight-fold increase since 2020—than any other method scammers used to contact customers, the FTC said.
The regulator also noted that social media offers easy access to billions of people from anywhere on earth, making a scammer’s job easier at very little cost.
“Scammers may hack a user’s account, exploit what a user posts to figure out how to target them, or buy ads and use the same tools used by real businesses to target people by age, interests or shopping habits,” the commission said.
The FTC’s findings are in line with PYMNTS Intelligence research showing that digital communication channels are some of the most common ways cybercriminals make their first contact with victims of financial scams.
Advertisement: Scroll to Continue
The commission points to a range of different types of social media scams, including investment scams, which produced losses of $1.1 billion.
Shopping scams were the most common type of social media scam last year, with more than 40% of victims saying that they ordered something they saw in a social media ad, only to be led to an unfamiliar website. Others ended up on sites impersonating well-known brands and claiming to offer steep discounts.
The FTC also cited reports showing that people reported losing more money last year to scams that began on Facebook than on any other social media platform. Two other Meta-owned platforms, WhatsApp and Instagram, were a distant second and third.
Last year, people reported losing far more money to scams just on Facebook than they reported losing to text-based or email scams, the FTC said.
Meta has of late been promoting its efforts to combat scams, including last month’s release artificial intelligence-powered anti-scam tools for WhatsApp, Facebook and Messenger.
In February, the company took legal action against advertisers it accused of impersonating celebrities to defraud users.
“Of course, celebrities are featured in many legitimate ads,” Meta said. “But because scam ads are designed to look real, they’re not always easy to detect. This scheme, referred to as ‘celeb bait,’ undermines people’s trust and violates our policies.”
