One in four people in the US who reported losing money to fraud from January 2021 to June 2023 said the contact started on social media, causing $2.7B in losses

Emma Fletcher / Federal Trade Commission :

Federal Trade Commission 2023-10-09 Emma Fletcher

Context & Ripple Effects

The FTC had already documented a sharp rise in social-media scam losses in 2021, when reported losses reached $770 million after growing dramatically from 2017. This broader reporting period turns that earlier warning about social-media scam losses into evidence that the channel is a sustained fraud entry point rather than a one-year spike.

The significance is not merely the loss total: social platforms are implicated at the first-contact stage, where impersonation, investment pitches, romance scams, and other schemes can reach targets before a payment occurs.

First-order effects

The FTC’s findings put social platforms’ account integrity, ad review, and scam-reporting systems under sharper scrutiny because a substantial share of reported fraud began there.
Consumers and fraud-prevention teams have a clearer signal to treat unsolicited social-media outreach as a high-risk contact channel, rather than only focusing on email or phone scams.

Second-order effects

Platforms face stronger incentives to identify repeat scam accounts and deceptive promotions earlier, while payment providers and law-enforcement partners may seek faster signals from social-media reports.
The data strengthens the case for comparing platforms by fraud-prevention performance, not only by engagement and advertising reach; the earlier 2021 FTC loss data provides the baseline for that comparison.

Third-order effects

If this pattern persists, trust-and-safety operations will become more central to platform governance, with greater emphasis on proving that discovery, messaging, and advertising systems do not repeatedly funnel users toward fraud.
Regulators may increasingly evaluate online intermediaries through the full fraud pathway—from first contact to payment—rather than treating scams as isolated content-moderation failures.

The trend: Social-media services are becoming a primary fraud-distribution layer, pushing platform safety systems toward a more consequential role in consumer protection.

Discussion

@SteveThompson@mastodon.social Steve Thompson on mastodon
Why is FTC reporting this and not doing everything in its power to stop it? They're like the CDC telling us what to do about Covid after failing to prevent the outbreak. Is that all these agencies do, report data? — “FTC Data Shows Consumers Report Losing $2.7 Billion to Soci…
@ftc @ftc on x
New data spotlight shows that in 2023 online shopping scams are the most commonly reported social media scam, but consumers reported losing more money to investment scams /2
@scdca @scdca on x
Online shopping, investment and romance scams often start on social media. New @FTC data shows consumers report losing $2.7 billion to social media scams since 2021. Learn more about how scammers are hiding in plain sight and how to protect yourself: https://www.ftc.gov/... [imag…
@ftc @ftc on x
Cryptocurrency played a significant role in the investment scams consumers reported; more than half of the reports showed that consumers paid the scammers using cryptocurrency. /3
@catalinagoanta Catalina Goanta on x
Consumer scams on social media are growing, and yet social media platforms don't take enough action on this (see the EU data in the DSA transparency database, n=39m content moderation decisions). Scam data from FTC, but Europol reports on similar trends https://www.ftc.gov/... [i…
@swiftstories Mike Swift on x
US consumers lost $2.7 billion on #socialmedia scams this year, according to a new report just released by @FTC which says 1 in 4 people who lost $$ on a scam said it started on a social media platform: https://www.ftc.gov/...
@wsculley Welly Sculley on x
The internet needs better solutions for digital fraud

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