FTC Warns About Social Media Advertising Scams | #socialmedia

Americans reported losing about $770 million to fraud on social media last year, an 18-fold increase from 2017, the Federal Trade Commission (FTC) recently reported.

According to the report, released Jan. 25, those losses account for one-quarter of all reported losses to fraud last year. While the losses increased across age groups, consumers ages 18 to 39 were more than twice as likely as older adults to report losing money to scams in 2021.

The number of consumers that reported fraudulent schemes on social media more than doubled to 95,000 in 2021, up from 46,000 in 2020, the FTC said.

Investment scams were the No. 1 category of total reported dollar losses, followed by romance swindles. Most of the losses came from Americans who lost money to online shopping scams.

A majority of the reports stemmed from online shopping scams, where consumers ordered a product they spotted on social media but the product was never delivered. Per the report, nearly nine out of 10 consumers said they purchased those products on Facebook or Instagram.

“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,” the FTC said in its report.

The FTC recommends consumers protect themselves by limiting who can see their posts and personal information and check to see if they can opt out of targeted advertising.

Congress is also considering legislation that would tighten regulations to stop price gouging and COVID-related scams targeting the public.

Read more: Congress Eyes Giving Federal Regulators More Tools to Combat Pandemic-Related Scams, Price Gouging

At the Stopping COVID-19 Fraud and Price Gouging hearing Tuesday (Feb. 1), Sen. Richard Blumenthal, chairman of the Senate subcommittee on consumer protection, product safety and data security, revealed his office received 800 reports of price gouging in his home state.

He insisted the lack of regulation by the federal government is part of the problem.



About: The findings in PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed the responses from 9,904 consumers in Australia, Germany, the U.K. and the U.S. and showed strong demand for a single multifunctional super apps rather than using dozens of individuals ones.

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