FTC reports a staggering loss of $4.4B to scammers on social media

Beware of impostors who ‘phish’ your information, love fraudsters who ask for money

By Marivir Montebon

New York – The Federal Trade Commission (FTC) warned social media netizens about the rise of catphishing (yes, Virginia, pronounced as catfishing) scams for the first half of 2023 on social media. Catphishing is the newest way scammers use emails and text messages to get information and scam people of their precious money.  

So far, the social media is the highest source of catphishing scams, with a total loss of $4.4B of the 1.1 million reported cases from January to June this year, the FTC Consumer Sentinel Report said.

FTC’s Benjamin Davidson

Benjamin Davidson, an attorney at the Division of Marketing Practices, of the FTC, said that fraud cases have been going down in the past years, but the value of the losses have gone up. As such, public education about scamming needed to be relentless.

Davidson spoke during the nationwide media conference of the Ethnic Media Services (EMS) on September 1, 2023. The media briefing with the FTC aimed at informing the public on the newest ways scammers use emails, and text messages to get people to pay or steal passwords, account numbers, or Social Security numbers, called ‘phishing.’

Davidson noted that once the scammers get this vital information, they can get access to emails, bank and other accounts, resulting in huge losses of money.

The FTC Sentinel Reports for January to June 2023 identified the following sources of scams, prevalent on social media:

1.     Impostor frauds – scammers posing as salespersons, family members, and friends who get people to buy products or pay for services;

2.     Online shopping – be wary of fake delivery systems and they are just to get your information.

3.     Prizes, sweepstakes, lotteries – an example would be that you won a lottery, and you need to pay a certain amount to be able to receive the prize money. That’s a no.

4.     Investments – scammers pose as experts in finance and will help you put your money into ainvestment programs.

5.     Business and job opportunities – the public is lured to get into business or apply for jobs (thus giving vital information)

Be wary of catphishing scammers on social media (Photo from throttlenet.com)

Additionally, scammers have tapped into artificial intelligence with its voice coining technology.  Scammers usually ask for ‘emergency help’ from unsuspecting family members and friends such as losing one’s passport while on vacation, thus the need for money.

Davidson noted that it is not easy to detect fraud but advised the public to “slowdown” in reacting to requests for emergency assistance from those who pose as friends or family members. He said that the public needs to “verify” by asking certain family or personal information from those seeking help.

Davidson told media practitioners that consumer education is key to curb social media fraud.

Attorney Rosario Mendez of FTC’s Consumer and Business Education department said that money could be recovered if people paid in gift cards or credit cards.

“You must act quickly and ask the company to block payment. You must also report to FTC reportfraud.ftc.gov,” she advised.

The FTC also noted the rise of romance scams on social media. In 2022, total losses reached $143 million which was higher than any other scams recorded. The FTC website issued this warning on romance scams: “If an online love interest asks you for money — especially using gift cards, wire transfers, payment apps, or cryptocurrency — that’s a scam. Period.”

You cannot simply do anything for love, Virginia. #