Scammers Make Off with $2.7 Billion Through Social Media Dupes Since 2021

Scams on social media sites like Facebook and Instagram have caused more financial harm to Americans than any other kind of interaction. A recent study by the Federal Trade Commission (FTC) details the staggering breadth of deceit. According to FTC data analysis, between January 2021 and June 2022, social media fraud cost Americans almost $2.7 billion.  This exceeded all other formats, including phone, text, email, and mail.

"Social media gives scammers an edge in several ways," wrote FTC data researcher Emma Fletcher. Impersonation and hacking combined with targeted advertising tools allow fraudsters to manipulate users methodically.

The most frequent social media scams involve online shopping, comprising 44% of reported fraud. People purchase items through Facebook or Instagram ads but never receive the products. While shopping scams were most common, investment fraud accounted for the highest losses - over 50% of dollars scammed—cryptocurrency featured in more than half of reported investment scams. Romance scams also remain prevalent, with the FTC warning users never to send money to someone they haven't met in person. Scammers utilize fake profiles and hacking to manipulate victims' emotions.

Social media scammers cast a wide net, but tactics are often tailored to specific demographics. Young adults aged 18 to 39 were over 80% more likely to report social media fraud than older users. However, older adults' median reported losses skewed higher at $750 per scam versus $500 for young users. This suggests fraudsters leverage more persuasion and manipulation when targeting older demographics.

While awareness helps, social media users need actionable steps to avoid scams. The FTC advises limiting profile visibility, calling friends if they request urgent money transfers, and researching companies before purchasing. Enabling two-factor authentication and reviewing privacy settings can also stem account hacking and impersonation. Seeking unbiased information before engaging with investment opportunities is critical as well.

As scams proliferate across social platforms, regulators are considering remedies. Legislation like the Social Media Consumer Protection Act proposes holding companies liable for online harms. Though social networks argue they simply provide a platform, consumer advocates say design choices and algorithms drive engagement patterns that can enable deception.

Tighter controls remain controversial, but change may be coming. In the meantime, the FTC is raising awareness of leading scam tactics to empower citizens. But media literacy and critical thinking remain our best defenses in the burgeoning digital Wild West. Staying vigilant and questioning content are essential social media survival skills.