Fraud Watch: Social Media Scams | Opinion
Do you recognize the names Kuaishou, QZone or Sina Weibo? Maybe not, but most people in the world recognize at least most of them: Facebook, Instagram, Snapchat, Twitter, TikTok. Welcome to the growing world of social media. The number of users is staggering. Facebook alone has nearly two billion people accessing its “service” daily; that’s almost a quarter of the planet’s population and not counting those who only open their Facebook account five times a week. Add the other media services and I think you understand why I use the word amazing. Social networks are a gold mine for scammers.
In 2021, the Federal Trade Commission reported losses of over three-quarters of $1 billion from social media scams; almost 100,000 victims. These numbers are from the FTC only and do not include what is reported to other agencies or state governments, let alone what is not reported. Online shopping and investment scams account for the majority of social media scams, as well as romance scams.
Nearly half of the scam complaints received by the FTC were for online purchases; attractive advertisements promoting low-cost in-demand items from branded companies. Facebook and Instagram accounted for nearly 90% of fraudulent ads. Criminals have even used services provided to advertisers that allow commercial targeting based on individual habits. The ads lead to copycat websites offering deep discounts (what angler wouldn’t want $249 LL Bean wading boots on sale for $129 with free shipping?) and promote payment with money transfer programs such than Zelle and Vemno. In the end, no proceeds are received and the criminal benefits. Four recommendations: 1) Don’t buy from social media ads; 2) Always do your homework if you are unfamiliar with the seller. Check with the Better Business Bureau or search the company’s browser by appending the word “scam” or “complaint” to the name; 3) Do not click on the link provided. Enter the name of the retailer on the search line and go to the official site. If there is a sale, it will show up there. Branded companies don’t offer deep discounts to billions of social media users; 4) If you decide to take a chance and make a purchase, use a credit card and not a debit card, as credit cards offer a lot of protection against fraud.
Investment scams are also growing at a rapid rate via social media. Some involve a cryptocurrency like Bitcoin to invest in traditional categories such as stocks, bonds, precious metals, oil exploration, and real estate. Very often, the criminal uses social media to “befriend” the victims and develop a relationship with them before setting the investment trap. In 2021, the median loss in an investment scam was over $1800. Losses of up to $40,000 are common, but in most cases are easily avoidable.
Don’t be seduced by the promise of high returns or guaranteed loss protection. It may sound great, but the promises may be too good to be true. Although the offer may be tempting, avoid investing solely on the advice of a social media “friend” and look for the “opportunity”. Legitimate investments must be registered with your state, usually the Secretary of State or Department of Financial Regulation, and brokers must also be registered. Don’t succumb to the urgency or need to transfer money through cash services such as Zelle, Venmo, or wire transfer.
Social media and discussion forums provide connection, relief from isolation, and recovery from personal loss. Social media also provides a great opportunity for criminals to commit fraud and identity theft. Taking a few steps can add some protection against victimization. When dealing with social media, remember that every entry you make is being monitored by someone or something (a computer). Be discreet when sharing personal information. Innocent comments about health, preferences or family become ammunition for the scammer. Consider carefully any request from strangers to “friend” you or enter your circle of contacts. You may be exposing yourself to a scam.
Questions or concerns? Contact [email protected] Elliott Greenblott is a retired educator and coordinator of the AARP Vermont Fraud Watch Network. He hosts a CATV program, Mr. Scammer, distributed by GNAT-TV in Sunderland, VT – www.gnat-tv.org.