Scammers stole $770 million through social media in 2021, says FTC

The Federal Trade Commission, which is currently involved in a lawsuit to breakup Facebook and Instagram parent Meta, has released some stats pointing to the extent of social media fraud.

The top line stat from the FTC is that more than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021. This apparently represents 25% of all reported losses to fraud for that year, and an eighteenfold increase over 2017. Presumably this exclusive to the US, although that was not specified.

Investment scams, romance scams, and online shopping fraud accounted for over 70% of the crime apparently, and reports are up for every age group, but people between 18 to 39 more than twice as likely as older adults to report losing money to these scams in 2021.

More than half of people who reported investment scams in 2021 said it started on social media, and more than a third of people who said they lost money to an online romance scam in 2021 said it began on Facebook or Instagram specifically.

Meanwhile 45% of social media scams were related to online shopping – and there are a couple of platforms singled out here in particular again: “when people identified a specific social media platform in their reports of undelivered goods, nearly 9 out of 10 named Facebook or Instagram.”

So the bottom line is there is an increase amount of fraud going on online, which is worth reporting and noting. But there is context, and there’s also the tone of the report.

One paragraph reads: “For scammers, there’s a lot to like about social media. It’s a low-cost way to reach billions of people from anywhere in the world. It’s easy to manufacture a fake persona, or scammers can hack into an existing profile to get “friends” to con. There’s the ability to fine-tune their approach by studying the personal details people share on social media. In fact, scammers could easily use the tools available to advertisers on social media platforms to systematically target people with bogus ads based on personal details such as their age, interests, or past purchases.”

Which while there may be truth in this, it’s a bit like a police report on house burglary numbers implying that half the problem here is that people will live in houses.

It might not be irrelevant that the US government (and the EU for that matter) is banging heads with big tech on numerous fronts, and the FCC in particular is currently involved in a lawsuit to break up Meta – the owner of Facebook and Instagram, which incidentally are the only two platforms to be named in the report (and more than once).

So it is probably fair to say there may be some incentive for federal authorities to raise awareness of certain things, or release certain statistics into the public sphere while it has some related court action going on. But that isn’t to say that there isn’t also a rise in online scamming – two things can be true simultaneously.