3 Tips to Protect Against Social Media Scams
In 2024, social media scams cost Americans more than $1.85 billion—almost a 25% increase over 2023, according to the Federal Trade Commission. As the use of social media grows and companies have strengthened cybersecurity measures, bad actors are increasingly targeting the emotional vulnerability of individual users through investment scams.
One key difference with these scams is instead of seeking financial assistance¬¬¬—like the well-known romance scams requesting the victim to send money—this new breed of social media scammers purport to offer help.
Many social media cons start with a private message from a fraudster claiming to be a mutual acquaintance of someone in your social network. Once a bond is formed over weeks or even months, they boast of big gains from an investing opportunity and offer you a way in.
Others use the stolen identity of a legitimate financial professional, sometimes setting up a fake profile or website using their likeness. For example, in June 2022, the FBI warned of a cryptocurrency scam on LinkedIn in which bad actors posed as reputable financial professionals. After establishing a rapport, the scammers persuaded their victims to invest in what turned out to be a bogus cryptocurrency opportunity.
It's no longer just a phone call or a phishing email. Fraudsters are now using social engineering combined with sophisticated technology, which is becoming a real game changer in common social media scams.
How to avoid social media scams
Here are a few tips to help social media users steer clear of scams:
- Be extremely selective about the information you share, the invitations and friend requests you accept, and direct messages you respond to. That goes not only for social media platforms, including Facebook and Instagram, but also professional networks like LinkedIn.
- Vet any new contacts or opportunities carefully—an internet search for a name or details of an investment can unearth previous victims.
- And finally, if you own crypto, never share your private key or private wallet with anyone. This may sound obvious, but you'd be surprised how often people are tricked into doing so.
Of course, it never hurts to check with your financial advisor about any new investment opportunities that come your way, especially ones that raise red flags. Many advisors—including those at Schwab—stay abreast of the latest scams. Fraudsters may be growing more sophisticated, but with a little effort you can still stay a step ahead when using social media sites.
Social media scam checklist
If you're a victim of a social media investment scam, the fraudster may have stolen not just your money but also your identity by gaining access to your financial account, personal data, and other sensitive information. Here are some steps you can take to help protect yourself.
- Report any suspicious or fraudulent activity to the social media platform directly.
- If you suffer a financial loss, file a formal report with your local police, who can refer you to additional resources and agencies that can help.
- Immediately report the fraud to your financial institution and follow any instructions they provide regarding your account.
- Contact the fraud department of your creditors, such as credit card issuers, phone companies, utilities, banks, and lenders to dispute unauthorized charges.
- Contact the three major credit bureaus—Equifax, Experian, and TransUnion—to request a fraud alert on your account and a freeze on your credit report.
- Visit the Federal Trade Commission's IdentityTheft.gov to report identity theft and get a personal recovery plan.
Most importantly, continue to monitor all of your accounts for suspicious activity and follow best practices for securing your information and your social media accounts. You can find more tips, how-to guides, and learn about protecting yourself online at SchwabSafe®.