Scammers far more likely to succeed by using social media, study finds

The study, conducted jointly by the consumer-education arms of Better Business Bureau and the Financial Industry Regulatory Authority along with the Stanford Center on Longevity, was based on interviews of 1,408 consumers in 2018 who filed a fraud tip or report to the BBB between 2015 and 2018.

On social media, 91% of the respondents said they initially failed to recognize fraudulent advertisements as scams and proceeded to engage, and 53% eventually lost money. On websites, 81% of respondents engaged and 50% lost money.

Those represent far higher success rates for scammers than they experience through phone calls and voicemail, where only 39% of respondents engaged and 11% lost money. Some 42% of scam emails drew engagement and 13% led to monetary losses. The median losses among those who participated in the study were around USD 600.

The study found people most easily fall victim to what the BBB categorizes as “online purchase” scams, which involve purchases and sales on direct seller-to-buyer sites like Craigslist and eBay. Scammers may pretend to purchase an item and then send the seller a bogus check and ask for a refund of the “accidental” overpayment. In other cases, the scammer, when posing as a seller, will simply never deliver the goods, or send fake or inferior items.

Nearly half, or 47%, of the people who reported encountering online purchase scams lost money, compared with other prevalent types of schemes like “tech support” scams, where 32% reported losing money, and

The new study comes as scammers appear to be expanding their activities, helped in part by social media and online transactions. Consumers filed 372,000 fraud complaints to the Federal Trade Commission reporting a total loss of USD 1.5 billion in 2018, with the number of complaints up 34% from 2017, according to tallies by the report’s authors.

The respondents to the study - among the over 90,000 consumers who submitted scam reports to BBB - included both victims and those who escaped the harm of scam attempts. Of all those who participated in the survey, reporting scams from any of the sources studied, 47% said they didn’t engage with the scammers. Among the others, 30% engaged but weren’t victimized while 23% engaged and lost money. Among the respondents who engaged with scammers, 20% reported that such organizations intervened or tried to intervene to stop the scams and successfully prevented monetary losses in more than half of those cases.