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Social media platforms have become a popular and convenient way to discover new brands and products. However, an increasing number of scammers are using these platforms to create fake companies and push nonexistent merchandise to consumers.

What is a Social Media Shopping Scam?

In this scam, dishonest people create fake online stores or a fake account on popular social media platforms. They often steal logos, photos, and product descriptions from legitimate brands to appear authentic. These scammers might even interact with potential customers, answering questions and providing seemingly helpful information. However, their goal is to collect payment information and disappear without delivering the promised products.

Example of the Scam

Say you see a sponsored ad on Instagram for a pair of sunglasses at 50% off. The ad features high-quality photos and links to a seemingly professional website. You follow the link and find glowing reviews from other customers. Convinced it’s a legitimate company, you place an order using your credit card. However, weeks go by, and the sunglasses never arrive. When you try to contact the company through its website or social media, you receive no response. This is a major red flag, and a sign you’ve encountered a social media shopping scam.

How Common are Social Media Scams?

Unfortunately, social media scams are quite common, especially in younger generations. According to a report by the Federal Trade Commission (FTC), social media was the highest form of contact to report fraud losses between January 2021 and June 2023. The losses totaled $2.7 billion. This figure is significantly higher than the next two highest forms of contact, websites/apps and phone calls, which totaled $2 billion and $1.9 billion, respectively. In the first six months of 2023 alone, people aged 20-29 reported social media as the contact method for online consumer fraud 38% of the time.

Facebook and Instagram are the primary culprits regarding social media scams. Ads on both platforms can be incredibly deceiving and enticing. If you have either platform, take a look at your feed. How many ads do you end up seeing in a single session?

Facebook Marketplace Scams

Facebook Marketplace is another area of social media where you will likely come across scams. Facebook Marketplace is a component of Facebook, where users can buy, sell, or trade virtually anything, from electronics to home goods and furniture. This feature is based on location, showing you products that are for sale in your area (or featuring the product you are selling to others locally).

When you’re making a transaction with Facebook Marketplace, it’s best to handle the process with cash, as opposed to using apps like Zelle or Venmo. If you’re traveling to pick up an item you’ve purchased, be sure to take someone else with you. Or if you’re selling an item, have the individual meet you at your local police station or an agreed-upon public meeting spot during the daytime and ensure someone else will be with you.

Tips for Protecting Yourself

You never want to move right ahead with a purchase when you see an unbelievable ad for a product you’ve wanted on social media. Remember, if it’s too good to be true, it probably is. Follow these steps below to recognize the warning signs and protect yourself:

• Research the company thoroughly. Before purchasing from a company you've found on social media, verify its legitimacy through its website, or by confirming a valid contact number and physical address.
• Be skeptical of deep discounts. If a price seems too good to be true, it probably is. Compare prices with other retailers to ensure the discount is reasonable.
• Inspect the website and its social media profiles. Pay attention to the quality of the website and social media profiles. Look for inconsistencies, grammatical errors, and a lack of engagement from other users. These could be signs of a fake company.
• Use secure payment methods. Avoid paying for products through wire transfers or gift cards, as these methods offer no protection if you’re scammed. Use credit cards, which offer better fraud protection and the ability to dispute charges.
• Trust your instincts. If you feel something is off about a company or its products, trust your gut and don’t make the purchase.

If You've Been Scammed

While it’s unfortunate if you’ve been duped by a scam on social media, there are steps you can take to report the scammer, warn others, and report the charge with your credit card company.

• Contact us. If your account information has been compromised or if you believe you’ve mistakenly paid a scammer, let us know.
• Report the scam to the FTC. File a report with the Federal Trade Commission at ReportFraud.ftc.gov and your local law enforcement agency.
• Report the scam to your state attorney general. You can find their contact information at naag.org.
• Report to the social media platform. If you’ve been scammed through a social media platform, report the fake company or profile to the platform. This can help prevent others from falling victim.
• Contact your Credit Card company. If you paid with a credit card, dispute the charges and request a refund.
• Warn others. Share your experience online to warn others about the scam. Be sure to mention the name of the fake company and any social media accounts they use.

As always, if you suspect you've been the victim of any type of fraud, you can always call our Contact Center at 215.969.0777. A representative will be able to assist you and help you with identifying next steps regarding your situation. You can also visit our Security page to learn more tips for protecting yourself.