Consumer Protection Data Spotlight | October 2020 1
Scams starting on social media proliferate in early 2020
Social media can be a great way to connect with
friends while the pandemic has you keeping your
distance. But reports to FTC’s Consumer Sentinel
Network suggest that that social media websites and
apps have become popular hangouts for scammers,
too. Reports that people lost money to scams that
started on social media
1
more than tripled in the past
year, with a sharp increase in the second quarter of
2020.
Reports about scams that started on social media have
been increasing for years. In 2019, total reported
losses to these frauds reached $134 million. But
reported losses reached record highs, climbing to
nearly $117 million in just the first six months of
2020. In that time, the reported scams that started on
social media often related to online shopping, romance
scams, and supposed economic relief or income
opportunities.
Reports about ecommerce sites that don’t deliver the
goods top the FTC’s list.
2
These reports skyrocketed
with the pandemic, and nearly one in four reports to
the FTC mentioned a social media hook.
3
People
mentioned Facebook or Instagram in 94% of reports
that identified a specific platform,
4
many saying they
ordered after seeing an ad. These scam ads look real
and can be carefully targeted to reach a particular
audience. The scammers can delete comments on their
ads or posts, so that negative responses don’t show up
and alert people to the con.
About half of all romance scam reports to the FTC
since 2019 involve social media, usually Facebook or
Instagram.
5
However, since the pandemic began, more
people than ever have reported losing money to
romance scams. That includes the scams that start with
a social media message or friend request.
6
People are increasingly reporting social media
messages that offer grant money and other giveaways,
supposedly to help people during the pandemic. These
scams offer so-called relief to people in need of cash,
but scammers are really after your money, your
Consumer Protection Data Spotlight | October 2020 2
information, or both. These messages can even come
from friends who may have been hacked, or who don’t
know the offer is a scam, since scammers often tell
people to send their message on to others.
As people seek more ways to earn money, reports
about multi-level marketing (MLM) companies and
pyramid schemes – including blessing circles and
other gifting schemes – on social media have
increased. The numbers were up a staggering fivefold
in the second quarter of 2020.
7
Many of these
recruitment offers reportedly came with extravagant
claims about likely earnings, which is always a red
flag. Some MLM companies are illegal pyramid
schemes: they survive on recruiting new participants
rather than selling products. Most people who join an
MLM make little or no money with it, while people
who become involved with a pyramid scheme
typically lose everything they invest.
The many scams that show up on social media may
benefit from scammers’ low-cost access to entire
networks of people. The scammer can hide behind a
phony profile, pretend to be someone you know, or
even take over a real account. By hiding who they are,
they can get into a virtual community you trust,
leading you to be more likely to trust them.
Here are some tips to help you steer clear of
scammers on social media:
• Before you buy based on an ad or post, check
out the company. Type its name in a search
engine with words like or “scam” or
“complaint.”
• Never send money to a love interest you have
not met in person.
• If you get a message from a friend about a
way to get some financial relief, call them.
Did they forward it to you? If not, tell them
their account may have been hacked. If so,
check it out before you act.
• Before paying into an “opportunity” to earn
money, check out ftc.gov/mlm.
• Don’t make it easy for scammers to target you
– check your social media privacy settings to
limit what you share publicly.
If you spot a scam, report it to the social media site
and the FTC at ftc.gov/complaint
.
1 This analysis includes fraud reports directly to the FTC where the method of contact was specifically identified as social network, and reports where the method of contact
was not specified, specified as internet, or consumer initiated contact, if the comments field also included mention of Facebook, Instagram, LinkedIn, Pinterest, Reddit,
Snapchat, TikTok, Tumblr, Twitter, or YouTube. The analysis excludes reports categorized as complaints about social networking services, internet information services,
mobile text messages, and unsolicited email.
2 In Q1 2020 and Q2 2020, 28% of reports of frauds that started on social media were categorized as online shopping fraud where the goods were ordered but not
received, followed by romance scams (13%), business imposter scams (6%), family and friend imposters (6%), and government imposter scams (4%).
3 In Q1 and Q2 2020, of the 43,391 reports directly to the FTC about undelivered online shopping orders, 9,832 (23%) indicated the problem started on social media.
4 Of the 9,832 reports (in Endnote 3) about online shopping orders that never arrived, 7,974 reports identified one or more of the social media platforms listed in Endnote
1, including 7,502 that identified Facebook or Instagram.
5 From January 2019 through June 2020, 10,491 (48%) of the 21,941 romance scam reports directly to the FTC were scams that started on social media. Of these, 5,845
identified one or more of the social media platforms listed in Endnote 1, including 5,147 that identified Facebook or Instagram.
6 In Q2 2020, 2,621 people reported a monetary loss on a romance scam directly to the FTC, a 19% increase over the previous quarterly high of 2,208 in Q1 of 2020.
7 These figures are based on reports directly to the FTC categorized as multi-level marketing\pyramids\chain letters. In 2020, reports in this category increased from 387
total reports in the first quarter to 824 total reports in the second quarter. Of those that started on social media, the increase was 94 in Q1, compared to 491 in Q2.
