Figures based on fraud reports directly to the US competition watchdog Federal Trade Commission (FTC) showed that those losses account for about 25 per cent of all reported losses to fraud in 2021.
It represents a stunning 18-fold increase over 2017 reported losses, the report said.
More than one in four people who reported losing money to fraud in 2021 said it started on social media with an ad, a post, or a message. The data suggest that social media was far more profitable to scammers in 2021 than any other method of reaching people.
Reports are up for every age group, but people 18 to 39 were more than twice as likely as older adults to report losing money to these scams in 2021.
For scammers, there is a lot to like about social media. It is a low-cost way to reach billions of people from anywhere in the world. It is easy to manufacture a fake persona, or scammers can hack into an existing profile to get “friends” to con, the report said.
There is the ability to fine-tune their approach by studying the personal details people share on social media, it added.
While investment and romance scams top the list on dollars lost, the largest number of reports came from people who said they were scammed trying to buy something they saw marketed on social media.
In fact, 45 per cent of reports of money lost to social media scams in 2021 were about online shopping. In nearly 70 per cent of these reports, people said they placed an order, usually after seeing an ad, but never got the merchandise.
Some reports even described ads that impersonated real online retailers that drove people to lookalike websites. When people identified a specific social media platform in their reports of undelivered goods, nearly 9 out of 10 named Facebook or Instagram.