Scammers profited over $658 million from social media users in H1 2023

Social media is one of the main tools modern society uses to keep in touch, stay up to date with global events, go shopping, and entertain itself. However, it is also increasingly becoming a goldmine for scammers and cybercrooks. Frauds originating on social media netted scammers more money than any other contact method this year.

According to data presented by the Atlas VPN team, social media scams earned fraudsters an astounding $658M just in H1 2023, exponentially higher than any other contact method. Compared to 2022, total reported fraud losses increased by $50M (from $608M). 

In all, 83,302 fraud instances originating from social media were recorded in the first half of 2023. Though the figure is slightly lower than over the same period last year, scamming, in general, continues to rise. The total number of social media fraud reports has more than tripled since 2020 when 25,459 instances were registered.

The numbers are based on data provided by the Federal Trade Commission (FTC) of the United States, which draws on 171,330 directly reported social media fraud instances throughout H1 2023 and H1 2022 and reports provided by Sentinel Data.

After social media, scams on websites and apps were the second most effective platform for luring money in H1 2023. Although the total fraud losses were lower than in the first half of 2022 ($490M), they still amounted to $432M out of the pockets of unsuspecting victims.

Phone call scams occupy the third place, with reports showing their profitability increased by almost 10% from $388M in H1 2022 to $426M in H1 2023. It is speculated that phone calls remain a popular avenue for scammers targeting older generations because they have yet to adopt social media as widely as other cohorts.

A further $198M was obtained through e-mail scams, $180M through text messages, $107M via ads or pop-ups, and $36M through mail. This brings the profit of fraudsters in H1 2023 to a whopping $2.04B. However, this number is likely underestimated, as research shows most fraud cases go unreported.

Millennials and Gen Z: most susceptible to social media fraud

Consistent with generational differences in social media usage, data from H1 2023 suggests that younger people are more likely to fall for scams originating on social media.

The most susceptible group by far were people ages 20-29 who lost money through social media in 38% of all fraud cases. The number then drops to 32% for people ages 30-39, 29% for people ages 40-49, and 26% for ages 50-59. 

Among older generations, social media ceases to be the top contact method for scammers, overtaken by websites or apps for ages 60-69 (21%), as well as phone calls for ages 70-79 (23%) and 80 and over (35%).

According to the FTC study, most social media fraud charges this year have resulted from users attempting to purchase electronics, clothing, or other items advertised on Facebook, Instagram, or Snapchat. The product would allegedly never be delivered in these cases, even though the user ordered and paid for it.

However, despite online shopping scams having the most reports, 53% of the funds lost due to social media usage were obtained by investment scammers. While posing as successful investors, these fraudsters frequently con people into downloading fraudulent apps or visiting phony websites in the hopes of making profits. Noteworthy is that most of these scams were conducted using cryptocurrency.

Steering clear of social media scams

Even if fraud affects every generation differently, no one is entirely safe from scammers online. Here are a few tips for avoiding social media scams:

• Restrict who can access your social media profile, postings, and information. Every platform gathers personal data about you through social media activity; however, you can impose some limitations by adjusting your privacy settings.
• Call a friend if they message you regarding an urgent financial need or opportunity too good to be true. If they ask you to pay with a wire transfer, gift card, cryptocurrency, or other payment methods popular among cybercriminals, their account might have been stolen. 
• Remain calm if someone unknown approaches you on social media to initiate a friendship or romantic relationship, as that is often a first step in coaxing money out of a person. Moreover, you should never pay money to someone you have not met.
• Investigate any brand or merchant before making a purchase. Look for its or their name online along with the terms "scam" or "complaint."