Fraudsters who bilk social-media users often lure them with targeted ads on Facebook or Instagram, according to a new Federal Trade Commission report examining social-media scams.
“Social media gives scammers an edge in several ways,” the FTC warned consumers in a report issued Friday.
“They can easily manufacture a fake persona, or hack into your profile, pretend to be you, and con your friends,” the FTC added. “Scammers who place ads can even use tools available to advertisers to methodically target you based on personal details, such as your age, interests, or past purchases.”
That report estimated consumers lost $2.7 billion due to fraud on social media between January 2021 and this June.
Many of the social-media fraud reports made to the FTC in the first half of this year centered on online commerce and involved purchases that never arrived. Victims of those scams often made the purchase after seeing an ad on Facebook or Instagram, the FTC reports.
That type of commerce-related fraud accounted for 44% of reports made to the FTC in the first six months of the year, but only 8% of financial losses -- with a median individual loss of $100.
Investment-related social-media scams, typically involving cryptocurrency, accounted for 20% of reports to the FTC and 53% of financial losses -- with a median individual loss of $3000.
“To draw people in, these scammers promote their own supposed investment success, often trying to lure people to investment websites and apps that turn out to be bogus,” the agency wrote. “They make promises of huge returns, and even make it look like an 'investment' is growing.”
Among other recommendations, the FTC suggests people should check their privacy settings and limit visibility of posts and information.
Online scams are at the center of an ongoing legal battle involving Meta Platforms, which was sued in 2021 by two consumers who said they were bilked by advertisers on the platform.
U.S. District Court Judge Jeffrey White in the Northern District of California dismissed the lawsuit, ruling that Section 230 of the Communications Decency Act protects the social-media platform from lawsuits over ads created by outside companies.
The consumers appealed to the 9th Circuit Court of Appeals, which is expected to hear arguments on October 17.