You probably know someone who has lost money in a social media scam

Social media helps you stay connected with family and friends — and hordes of scam artists connect with you.

About a quarter of all financial losses from fraud reported to the Federal Trade Commission in 2021 — or roughly $770 million — stemmed from online scams originating on social media platforms like Facebook, Instagram, TikTok and others. That's an 18-fold increase in the number losses related to social media fraud since 2017, according to the agency.

Over 95,000 victims — more than twice the number in 2020 — said they lost money after falling prey to a deceptive ad, post or message they received on a messaging, photo-sharing or similar app. 

Investment scams accounted for the biggest chunk of dollars lost, with payment made in cryptocurrency in 64% of these cases, the FTC said this week. Romance ripoffs are rampant, too, with 24% of funds lost in scams last year going to strangers who sweet-talked their targets into sending them money.  

Undelivered goods

The greatest number of scams stemmed from shopping, in which consumers purchased a product from a store they discovered on social media only never to receive the item. In most cases, fraudulent sellers impersonated legitimate retailers. Most victims in these schemes paid for the non-existent goods using cryptocurrency, according to the FTC. 

Given the "huge surge" in people losing money to fraudsters who target them through apps, the consumer watchdog described social media as a "gold mine" for scammers.

It's not just older adults — who are typically seen as less tech savvy than younger generations — who are targeted. Americans of all ages are getting taken. In 2021, people between the ages of 18 and 39 were more than twice as likely as older adults to report having money in a social media scam, according to the FTC.

Social media platforms give criminals easy access to billions of people across the globe. It can also be hard to identify bad actors who manufacture sophisticated-looking profiles that can appear legitimate. 

For example, con artists can pose as a target's friend or connection by duplicating the profile of an authentic contact in their network, then appeal to that person directly to ask for money or request help. They can also mimic the appearance of authentic advertisements from established retailers to produce deceptive ads or push bogus cryptocurrency investments that promise huge returns. 

How to protect yourself

Here are precautions you can take to avoid being scammed on social media.

• Revisit your privacy settings on social media apps. Limit who you share your data with by allowing only people you know to view your posts. 
• If a platform allows it, block social media apps from sending targeted advertisements. Keep your apps updated, as out-of-date software can more easily be hacked. 
• Delete apps you don't use frequently to avoid unnecessary collection or personal data.
• If someone who you think is a friend asks for money over social media, call them to verify that it's legit.
• Before you make a purchase through an app, do a quick internet search on the vendor. Use the terms "complaint" and "scam" plus the company name and comb through the results before doing business.