Social Media Fraud on the Rise, Canadian Gov Warns

by , Aug 23, 2010, 2:25 PM
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Last week I wrote about the results of a survey showing that 90% of Canadian businesses use social media to communicate with the public. But what about all those unfailingly polite Canadian criminals? It turns out scammers are also jumping on social media in a big way, according to the Canadian government (although many fraudulent schemes are of international origin, so the culprits aren't necessarily Canadian).

The report from Criminal Intelligence Service Canada said that 38% of Canadians had been approached with a come-on for a fraudulent investment scheme in 2009. While this number is stable compared to 2007, the CISC said the amount invested in fraudulent schemes has increased significantly. The CISC attributed this in part to the rise of social networks, which allow scammers to issue professional-looking press releases and promotional material, recruit accomplices, and exchange lists of victims (according to the report, many individuals are susceptible to repeat victimization). The report named popular sites like MySpace, Facebook, Craigslist, Kijiji and YouTube.

Of the 38% of the population approached with fraudulent schemes, 11% actually give money to the scammers; that works out to about 4.2% of the Canadian population getting scammed in 2009. Among the 11% who get duped, 38% "invest" more than $5,000 (Canadian) -- up from 32% just two years ago. Doing the math, 9.1 million Canadian adults were approached with fraudulent schemes, one million were duped, and 380,000 "invested" more than $5,000. The average amount invested across Canada was $7,634, meaning scammers bilked Canadian victims of almost $8 billion in 2009!

Some of the most popular approaches for scammers are by email (33%), in person or over the telephone by a stranger (28%), and by a friend or co-worker (18%). The last category seems like an especially likely area for deploying social media scams, particularly in cases of "affinity fraud," meaning scams that target a specific group -- e.g. religious groups, business groups, seniors' groups, ethnic communities or social clubs. The CISC warned that "the fraudster may be a member of the group, may know someone in the group, or may simply pose as a member to exploit systems of trust, such as those established through religion, language, culture or ethnicity."

The Canadian figures come not long after a report from New Jersey Attorney General Paula T. Dow and the state's Acting Consumer Affairs Director Thomas R. Calcagni, who say they have seen an increase in the number of social media scams on Facebook or other sites, often using hijacked accounts. According to the state officials, common tricks used by criminals trying to hack into social network accounts include anything which requires you to paste a URL into your browser, quizzes, polls or contests asking for personal information like your social security number, credit card number or bank account information, requests to update Flash or download a new program, and anything that asks you link to another page and invites your friends there.

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