The United States Federal Trade Commission (FTC) has released new data revealing the extent of financial losses caused by scams originating on social media platforms.

According to the FTC’s latest report, these scams have accounted for US$2.7 billion in reported losses since the beginning of 2021, surpassing all other contact methods.

In its data spotlight, the FTC delves into the intricate landscape of social media scam trends for the first half of 2023. The findings shed light on the predominant types of scams and the modus operandi of fraudsters using these platforms to target unsuspecting victims.

Online shopping-related scams top the list of the most frequently reported incidents, constituting 44 per cent of all reported cases. Victims often fall prey to fraudulent schemes while attempting to purchase or sell products online. A significant number of reports revolved around individuals who never received the items they ordered, despite responding to advertisements on popular platforms like Facebook and Instagram.

In terms of largest overall losses, scams promoting counterfeit investment opportunities accounted for 53 per cent of all reported losses to social media scams during the first half of this year. Cryptocurrency, in particular, emerged as a significant facilitator of these scams, with more than half of the reports indicating that victims had transferred funds to scammers using digital currencies.

Second to investment scams in terms of reported losses were romance scams. These heartbreaking schemes often involve individuals establishing fake romantic relationships with victims, only to exploit their emotions and financial resources.

How to protect against scams

The FTC has issued recommendations for consumers to protect themselves from falling victim to social media scams. The agency advises individuals to take proactive steps to limit the visibility of their posts and the accessibility of their personal information on social media platforms. The FTC also encourages users to verify the authenticity of messages from friends or relatives soliciting money through social media by directly contacting them by phone or another trusted method.