Social media isn’t just a popular place for sharing photos of cute kids and animals, conspiracy theories, and the latest TikTok-dance fad; these sites are also magnets for crooks looking for victims.

Listen to audio highlights of the story below:

About one quarter of all fraud losses reported to the Federal Trade Commission (FTC) last year—$770 million—resulted from scams that started with social media ads, posts, or messages. That’s an 18-fold increase from 2017, according to the FTC’s latest Consumer Protection Data Spotlight newsletter.

More than 95,000 people said they lost money in a scam involving social media in 2021—double the number from 2020.

“In fact, the data suggest that social media was far more profitable to scammers in 2021 than any other method of reaching people,” the report noted.

Other key findings:

• The largest number of complaints last year came from people who lost money to shopping scams. In most cases, they ordered something they saw marketed on social media that never arrived.
• Investment scams were the costliest, followed by romance scams.
• More than half (54 percent) of the people who reported losses to investment scams in 2021 said the scam started on social media.
• Reports of social media fraud increased for all age groups, but those 18 to 39 were more than twice as likely to report losing money than older adults.

Fraudsters have always jumped on new technologies, so it’s no surprise they’ve embraced social media: It’s a low-cost way to target billions of people from anywhere in the world, and creating a fake persona is increasingly simple.

“On the internet, no one knows that you're a scammer located in some far-off country,” said John Breyault, who runs the National Consumers League’s Fraud.org website. “It's very easy for scammers to impersonate someone you know—like a friend or family member—someone who appears to live near you, or who is trustworthy, like someone in your religious community.”

Social media also allows cyber criminals to study their targets and tailor their cons based on personal information shared online, including age, interests, religious beliefs, education, and relationship status.

“We as a society are willing to share so much information about ourselves online, and it’s a treasure trove for the fraudsters,” said FBI Special Agent Ethan Via. “You're providing them with little nuggets of information that they can then use to get to know you, befriend you, and get you to lower your guard—and then exploit you.”
 

Online Shopping Scams

Nearly half (45 percent) of the complaints the FTC received in 2021 about social media scams were about online shopping.

That’s a “huge jump” from the year before, said Emma Fletcher, a senior data researcher in the FTC’s Bureau of Consumer Protection.

Nearly 70 percent of the victims said they ordered something after seeing an ad, but never got the merchandise. Some people said the fraudsters fooled them by placing ads that impersonated real online retailers and had links that took them to lookalike websites.

Of the complaints that identified the social media platform where the ads were spotted, nearly nine out of 10 named Facebook or Instagram.

Protect yourself:

• If you don’t know the online retailer, do some homework before you buy. Check out the company with the Better Business Bureau, and search online for the retailer’s name plus “scam” or “complaint.” You may discover others have had problems with that company.
• Rather than clicking a link on an ad, go to the retailer’s website yourself. If that low-price or amazing offer is legitimate, it will be on its website.
• Always use a credit card, not a debit card, when making online purchases. Doing so provides you with strong fraud protections set by federal law. If the merchandise doesn’t arrive or is defective, you can dispute the charge with your credit card company. With a debit card, you’re giving the retailer access to the money in your checking account, and if something goes wrong, it may be more difficult to undo the transaction.
   

Investment Scams

Looking at the FTC’s complaint database, it’s clear that social media is a lucrative way for fraudsters to pitch bogus investment opportunities, especially those involving cryptocurrency.

The commission saw “a massive surge” in complaints dealing with crypto fraud last year. The median loss reported was $1,800. The most frequent points of contact were Instagram and Facebook, followed by WhatsApp and Telegram.

Often, a scammer pretends to be a friend who wants to help you cash-in on an investment opportunity they’ve discovered. They promise huge returns in just a couple of weeks.

“People can come across as friends on social media when the truth is you haven't met them. Their profile might be fake; everything about them might be fake,” the FTC’s Fletcher told Checkbook.

“People think they’ve kind of found a kindred spirit, somebody else who’s really interested in getting into crypto, and the next thing you know, that person is leading them off to a bogus investment website where they lose all their money.”

Cryptocurrencies are not regulated by any government agency, and there is no insurance protection. While prices for virtual currency, such as Bitcoin, can surge rapidly, they’ve also tanked just as quickly.

“Without regulation, it is literally the wild wild west,” said Greg McBride, chief financial analyst at Bankrate.com. “With digital currency, there’s the risk of being hacked, and there’s no backstop for you if that happens, like there is if you’re with an FDIC insured bank, or you have an account with a brokerage firm that has SIPC protection. That just doesn’t exist in the world of crypto.”

Protect yourself:

• Never make an investment based on a recommendation from a “friend” on social media, even if it’s a message from someone you know—their account may have been hacked.
• If you’re being pressured to make a wire transfer, or pay with bitcoin, or other digital currency to open the investment account, that’s a huge red flag.
• Most legitimate investment products must be registered in the state where they are offered. Check with your state regulator before you do anything. You can find contact information for your state on the North American Securities Administrators Association website.
   

Romance Scams

We hear a lot about romance scams around Valentine’s Day, but they happen all year long. Criminals look to create phony relationships they can exploit year round.

“These scams often start with a seemingly innocent friend request from a stranger, followed by sweet talk, and then, inevitably, a request for money,” the FTC report explained.

After investment scams, romance scams are the second most profitable fraud on social media. More than a third of the people who said they lost money to an online romance scam in 2021 said it began on Facebook or Instagram.

In a new twist, the fraudsters are using the romance scam to groom people for investment scams. You think you’ve met a savvy investor, and before long they’re offering to teach you how to do it.

“Unfortunately, with emotions at play—such as love, and sometimes greed on the part of the victim, if it’s an investment vehicle—the fraudsters are very sophisticated in pulling those levers of human nature, to get people to open their wallets,” the FBI’s Via told Checkbook.

Once these romance con artists get you to trust them, they convince you to try the investment platform they recommend. Often, it’s just a small amount of money that seems to reap a big reward in a short amount of time. Feeling confident, you decide to make a large investment. Unfortunately, it’s all bogus. You’ll never see your money again, and your romantic investment partner will cut off all communications.

Because most of the fraudsters are not in this country, the FBI does not have jurisdiction once the money leaves the U.S. and must rely on the cooperation of a foreign government.

In almost every case, the victim has never met the perpetrator, the person with whom they though they were having an online relationship.

“These are scams that are happening entirely from a distance,” the FTC’s Fletcher said. “The scammer will always have an excuse [for not meeting]. Very often they'll say they're in the military and they're working overseas, or that they're on an oil rig, or something related to COVID-19 is preventing them from traveling.”

Protect yourself:

• If someone appears on your social media and rushes you to start a friendship or romance— slow down. Better yet, block that person if you are suspicious.
• A romance scammer wants to get you off the social media platform as quickly as possible. If you’re being pressured to move your correspondence to WhatsApp, text messaging, email, or other unmonitored means of communication, that’s a red flag.
• Never send money to someone you haven’t met in person, no matter how much you care for them, or how desperate the appeal for help.
• Before you send money to anyone for any reason, talk to someone you trust who is not emotionally attached to the situation. They might have a better perspective on what's happening. If they’re concerned, you should be, too.
   

Stop Sharing So Much

While online shopping, investment, and romance scams accounted for more than 70 percent of reported losses to social media fraud last year, there are other swindles to watch out for, and new cons are constantly being created. If you’re on social media, you’re a target.

Limiting the information you share, will greatly reduce your exposure. Make sure your privacy settings restrict who can see your posts and personal information. The more a criminal can find out about you, the better they can target their pitch.

Brett Johnson—a former cyber thief who spent more than six years behind bars and is now a cyber security consultant—advises limiting your friends to your actual friends. Be skeptical of all friend requests from people you don’t know, he said. Some of these requests will be from criminals who are looking to harvest profiles and personal information.

Click here for more info from Checkbook on improving your Facebook privacy settings.

“Make sure that the people that are able to look at your profile are people that you actually know,” Johnson told Checkbook. “You don't need all those likes, thumbs ups, and everything else like that. Just concentrate on people that you know, not getting numbers. Because when you're trying to get numbers…that's where criminals come in, and they will take advantage.”

Listen to our full interview with Johnson on our podcast, Consumerpedia.

Fraud fighters who spoke to Checkbook agree: We all need to be more skeptical about what we see on social media.

“If you receive a message from someone that you don't know or that you haven't spoken to in a long time on social media, it's more likely than not that it's a scam—so, don't respond,” said Fraud.org’s Breyault. “Just block that person and be done with it. If they really want to get in touch with you, they'll find another way to do it.”
 

More Info

• The Federal Trade Commission has information about online shopping scams, investment scams, and romance scams.
• If you’ve been the victim of online fraud, file a report with the FTC and the FBI’s Internet Crime Complaint Center IC3.
• From Checkbook: Online Privacy: How to Guard Yours
• From Checkbook: Facebook Privacy Settings Check-up