Social media is a part of millions of people’s everyday lives—we use it to keep in touch with friends, stay up to date with the news and check out all the latest trends. It can be a great tool in many ways, but, unfortunately, it can also be a stage for fraud. Social media scams use deceiving ads, posts, or messages to lure you into a potentially dangerous situation that could cost you.
Before making that dress purchase off of Instagram or sending an online romantic interest money to come visit you, read about what social media scams are, which flags to look out for, and how to protect yourself if you fall victim to this type of con.
A social media scam is when someone presents themselves fraudulently online either by creating a fake profile to contact you, selling you counterfeit items, or convincing you that you won a fake giveaway/sweepstakes.
Social media scams involve retrieving your personal information, including passwords, banking information, or login credentials. They could also directly or indirectly ask you for money through purchase, donation, contribution, or investment.
Scammers will then use any information they gather from you to either steal your money, personal information, or both.
About $770 million was lost by more than 95,000 people to social media scams in 2021, accounting for 25% of all reported fraud. Social media scams were more profitable for scammers in 2021 than by using any other method.
Signs of a social media scam are sometimes hard to detect but will often be one of those “too good to be true” moments.
Here are some red flags to watch out for:
Three of the most common social media scams that have taken hold in recent years are investment, romance, and online shopping scams.
Social media is a valuable tool for investors, but a scammer may use that same tool to hurt their business. Hiding behind the anonymity of social media can allow fraudsters to reach a mass audience without spending a lot of time or money.
One sign to watch out for with investment scams is a call for unsolicited investment. You may receive some sort of pitch or invitation to invest in something you’ve never heard of or a company whose statistics seem a little too good compared to the competition.
Additionally, investment newsletters are popular ways for companies to advertise their stocks to draw in new investors. While many are legitimate, they are also used to spread misinformation about worthless stocks by using false data, including the payments they receive and the success of their current stocks.
Online bulletin boards and chat rooms are also full of this false information spread by scammers. They present themselves as real investors or companies providing data that makes them seem legit. In reality, though, they are just trying to feed you lies about other companies or get you to invest in their fraudulent business.
Romance scams ranked as the second most profitable scam on social media in 2021. The average person caught by one of these scams lost about $2,000. They start as innocently as making a new connection online but inevitably turn into that individual asking for, and possibly taking, your money.
A popular rouse is to say they live or are working outside the U.S. After building up a relationship and trust, eventually, the time comes when they start to ask for money for anything from travel expenses to medical bills or paying off a debt.
A popular way for these romance scammers to ask for money is via wire transfer, by reloading a MoneyPak card, or by giving a gift card from a vendor such as Amazon or Google Play. This gets them their money fast, and there is almost no way of you getting your money back.
Online shopping made up 45% of all money lost to social media scams, according to the FTC’s 2021 report. About 70% of these people said they would see an advertisement, place an order, and never receive their merchandise.
Scammers will go to the point of creating an entire website to impersonate a well-known company to get you to purchase their product without any intention of providing you with the merchandise.
Some advertisements are set up on actual retailer sites advertising similar products at a fraction of the price. Following the link, you may be able to purchase an item, and you may even receive it in the mail, but no doubt it will be of far less quality than the item you paid for.
Websites also may be created temporarily to sell fake branded jewelry or clothing, then after a certain number of sales, the website and any trace of the business disappears. A common tactic of all these types of sites is to only accept payment via money order, wire transfers, or pre-loaded money cards.
Recognizing the scams is only the first step; you next need to actively avoid them. Here are some ways to beat social media scams.
Next time you log into your social media account, remember, if something looks too good to be true, it probably is. Being aware of what you do online can protect you and your family from social media scams.
If you think you have fallen victim to a social media scam, the first step is to verify if it is a real scam. If it has to do with online shopping, there may be a legitimate reason your merchandise has not arrived yet, so contact the seller immediately.
Otherwise, there are a few things you can do to secure your personal and financial information.
If paid the scammer using your credit card, report it as a fraudulent transaction and let them know what happened. You may get a full refund for your purchase by disputing the charge.
Unfortunately, if you paid via wire transfer, gift cards, or a prepaid card, you may not be able to get your money back.
Next, you will want to report the fraud to the appropriate departments. Report social media scams to:
Most social media sites also have a fraud department to report suspicious posts or messages that you can notify of your encounter.
You should protect yourself from further scams by immediately changing all your passwords and updating your security settings. Use a strong password with a mix of letters, numbers, and symbols and avoid using common words, phrases or your birthdate.
If you are concerned about identity theft, bank account, or stolen credit card information, you can place a fraud alert or credit freeze.
You only need to create a fraud alert once since placing one with Equifax, Experian, or TransUnion means it’ll automatically be reported it to the other agencies.
To freeze your credit, you must contact each consumer credit reporting agency separately.
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