There are many ways people can be scammed online. But for those exposed to a scam through social media or a website, the numbers are chilling—some 91% engaged with the fraudsters and 53% lost money, a recent study found.
Those figures come from new research by the FINRA Investor Foundation, the BBB Institute for Marketplace Trust and the Stanford Center on Longevity.
In fact, consumers are much more prone to engagement with fraudulent offers on social media and websites than they are to phone, e-mail or mail fraud, according to the organizations’ joint study, called “Exposed to Scams: What Separates Victims and Non-Victims.”
"The path to victimization begins with engagement," said FINRA Foundation President Gerri Walsh in a statement. "Social media and website scams are flourishing. Every time you respond to a friend request from someone you don't know or click through to an unfamiliar website, you run the risk of being exposed to a scam."
The most common fraud that the 1,400 participants in the survey reported to BBB Scam Tracker were online purchase scams, which correlated with the highest levels of engagement and victimization. Some 84% of consumers engaged with online shopping scams and 47% lost money, an alarming finding as Covid-19 increases the likelihood of online holiday shopping. Scams involving tech support, employment, fake checks, and lottery and debt collection also rated high for victimization rates, the research found.
“Do you spend a lot of time on social media sites or looking for great online deals? If so, then you wear a bull’s-eye when it comes to scammers hunting for money,” according to the report.
What separates victims from non-victims? Your chance of losing money to a scam varies by type—it depends on whether it’s an online purchase scam, a tech support ploy, a fake check or a sweepstakes fraud, for instance—and by the method in which you are exposed to the offer.
The odds of losing money to website scams were only slightly lower than the numbers for social media: 81% of consumers exposed to website fraud said they engaged—and 50% lost money.
While phone and e-mail were the most common methods scam artists use to make contact, relatively few consumers reported losing money that way. For example, 39% of respondents who said they were contacted by phone engaged with a scammer and only 11% lost money. In contrast, of those contacted by e-mail, 42% engaged with the scammer and only 13% lost money, the research found.
Other factors heighten the likelihood of falling for fraud. Consumers were more likely to be victimized if they were isolated and didn't have anyone to discuss the offer with, according to the study. As a result, those who engaged with scammers and lost money were less likely to be married and more likely to be widowed or divorced.
"Sadly, fraud victimization seems to go hand in hand with social isolation—whether involuntary or voluntary,” Walsh said. “Some respondents who lost money to scams told us they didn't want to hear that the fraud was just that—not real."
Consumers are also more likely to engage and lose money if they’re feeling financial strain or have lower levels of financial literacy, the study found.
One-third of consumers who were targeted by a scammer, but did not engage, reported that they already knew about the specific type of scam or understood the tactics and behavior of the scam artists, the research found.