The S in Social Media Stands for Scam
Social media: whether you love it, despise it, actively participate in it, or stubbornly avoid it, it’s intertwined with daily life. Through social media, the world is more connected than ever before and it makes financial criminals and scammers foam at the mouth with the amount of opportunity it brings them. It’s such a ripe hunting ground that, according to the Federal Trade Commission (FTC), 1 in 4 people who reported losing money to scams and fraud from 2021-2023 said it started on social media. In that same time frame over $2.7 billion in losses have been reported, which outweighs every other form of contact.
The four main categories of social media scams are online shopping scams, investment related scams, romance scams, and other frauds, such as false sweepstakes, generic phishing attempts, and job offer scams.
Online Shopping Scams
Online shopping scams account for the highest volume of fraud reports from 2021-2023 at around 44% of all reports. While these don’t often result in crippling losses, they offer scammers a way to make a very quick buck off of unsuspecting victims. In an online shopping scam, a scammer will either direct message their victim or set up an advertisement claiming to sell luxury goods such as expensive shoes or bags and technology. The victim will submit a payment for whatever item they’re interested in and then that item will simply never get delivered. By the time the payment has gone through, it’s too late as the scammer often blocks the victim or deletes their own account making it impossible to track them down again and the victim has now lost around $100.
Investment Related Scams
These scams are the real money makers for criminals that use social media as a hunting ground, with a median loss of $3,000 reported to the FTC and massive losses of millions of dollars also possible. In these scams, the fraudster will either, again, direct message the victim or make a post about how successful they’ve been in investing. These posts are completely fabricated and claim that only the scammer knows the right investments to make in order to cash out big. Once they’ve engaged a victim in conversation, the scammer will then either direct their victim to a fake investment site or app or point out a cryptocurrency to invest in with the promise of big returns. Once the victim dumps enough money into either the crypto or the fake investment platform, the scammer makes off with the money, never to be heard from again.
Staying Safe from Social Media Scams
If you use social media, it’s important to know how to recognize and avoid the various social media scams and John Marshall Bank has a few good tips and practices to help you do just that.
- Manage your privacy settings: on every social media platform, users have the option to limit who sees their posts and who can send them direct messages. Making your account private is a surefire way to prevent scammers from accessing your profile but if you don’t want to do that (which is understandable since the point of social media is to be seen), limiting your direct message settings to only your followers or people you know is also a strong defensive move.
- Don’t send money to anyone over social media: yes, even friends and family, as anyone’s account has the potential of being hacked. If a family member or friend asks you for money and you’re feeling generous, offer to meet them in person to provide the funds they need.
- Double-check profiles: before you start a conversation with someone over social media, be sure to double-check their profile to see they are who they claim to be, especially if you receive a message from a public figure or celebrity. For example: scammers tend to impersonate celebrities in an attempt to appeal to fans to get their money. If you get a message from Tom Cruise, make sure the account is verified and the username isn’t @TomCrulse, where a lowercase L replaces the I in his name. Generally, celebrities won’t message you, at all, so it’s safe to always assume it’s a scam.
- Only use established online stores: sites such as Etsy and Amazon offer secure ways to pay for the items you want and won’t leave you hanging once you’ve paid. Even the Instagram store and Facebook Marketplace are generally secure and scam-free (although be sure to always verify the seller is real if you use these). Additionally, anyone on social media selling something that isn’t connected to any of these online stores is a huge red flag and safer to avoid.
- Trust yourself and stay vigilant: as with every type of fraud, the best way to stay safe is to be careful and trust your gut. Before you send someone money or engage in a direct message conversation, double check the account to verify who you’re communicating with. If something feels off, it’s because it probably is. If you encounter a scammer, report them on the social media platform and then block them. If you’re unsure and don’t want to falsely report someone, blocking them does no harm.
Visit our Fraud Prevention Security Center for more information on types of frauds, statistics relating to fraud, and how to protect yourself and your funds.