Massive surge in online scams due to cryptocurrency

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Data from the Federal Trade Commission (FTC) display that bogus cryptocurrency investments led to an unprecedented increase in online scams last year.

Cryptocurrency is an easy target because while it’s surging in popularity, there’s still a lot of confusion about how it works and a lot of people are interested in the online world.

  • This is especially true among younger people who are digitally savvy but less financially literate.
  • People ages 18-to-39 were more than twice as likely to report losing money to social media scams as older adults last year.

Investment-related scams on social media are the most common, representing 37% of all reported losses. The next most popular scams are romance and online shopping scams. The greatest volume of complaints filed to the FCC came from rackets related to online shopping. The FTC said people send money, often cryptocurrency, on promises of huge returns, but end up empty handed.”

Fraud cases from social media now account for roughly 25% of all fraud cases in the U.S., up 18x from 2017

In 2021, more than 95,000 people reported losing around $770 million to fraud schemes on social media.

FTC highlighted the role Facebook and Instagram play in social media fraud, noting that more than a third of people who reported losing money to an online romance scam said it began on one of those platforms. It can be assumed a lot of the online shopping scams would have been from these platforms as well. Axios reported that:

  • Nearly 9 out of 10 named Facebook or Instagram as the platform in which online shopping scams related to undelivered goods originated, the agency said.
  • “We put significant resources towards tackling this kind of fraud and abuse,” said a spokesperson for parent company Meta.
  • “We also go beyond suspending and deleting accounts, Pages, and ads. We take legal action against those responsible when we can and always encourage people to report this behavior when they see it.””

The FTC, which regulates advertising, noted in its report that cheap, targeted ads on social media make it easier for fraudsters to hyper-target victims using information like their interests or past purchases.

  • Google and Facebook restricted crypto-related ads in 2018. Google reinstated them in a limited capacity last summer.

This article was originally sourced by www.axios.com.