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Lynn EnglishWritten by:
Lynn M. English
Lafayette Federal Credit Union
Senior Vice President, Risk Management

The holiday season is a time to be especially vigilant for online scams. Scammers are privy to the fact that consumers will be spending more time online during the holiday season, looking for great deals. Additionally, people increase their social media usage during the holidays, often sharing traditions, photos and participating in holiday-themed online activities.

Social Media Scams Are On the Rise

Social media involves interactive technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression. It offers platforms to connect with loved ones, make announcements, share photos, and get educated on subject matter.

Unfortunately, with the explosion of social media comes increased risk. Social media offers low-cost access to enormous networks of people, and scammers capitalize on this. Social media scams are on the rise, causing inconvenience, and, sometimes, financial catastrophe. The Federal Trade Commission (FTC) reported losses caused by social media scams in the first six months alone of 2020 totaling $117 million, up from $134 million for the entire year in 2019Opens in New Window.

Below are five common social media scams to watch out for.

Impersonation Accounts

Impersonation accounts are fraudulent accounts that use a similar name and profile picture of either someone you know (like a friend, family member, or acquaintance) or a public figure or brand. These accounts often post content from a seemingly "trustworthy” source, built to entice you to click a link or share personal information.

With this type of scam, you might receive a convincing direct message from what appears to be a friend, family member, or someone you trust. While these communications may raise a red flag immediately, it may also take some time to realize you’re not communicating to the person you thought you were (particularly if the scammer is experienced with this).

Some immediate red flags to look out for include: spelling mistakes, poor grammar, links to "free” or "discounted” prizes or products, or language that just seems "off”. If you are suspicious, it’s best not to click on links sent to you. If you believe one of your connections is in fact being impersonated by a scammer, reach out to them through a different means to confirm whether they sent the message.

Fake Gift Exchanges

Scammers craft their communications for this scam in a way that can be very enticing at first glance. The offer might include free prizes if you participate in a contest or giveaway, usually requiring you to post some sort of personal information. This tactic gives scammers just enough details to help them target you for future scams. Offering additional chances to "win” a prize for each person you invite to join you might tempt you to unwittingly involve your family and friends in a social media scam as well.

One hot scam trend today involves fun memes that prompt you to post information about who you are, your interests, or where you live. For example: "Post your age, street name, and the last thing you ate to get your performer name.” Once you’ve provided this information, you’ve given a potential scammer access to your personal information, which could then be used fraudulently.

The best defense here is not to click or comment on posts by people or brands you don’t fully trust. If a contest or giveaway shows up in your feed from the verified account of a reliable brand or individual you know, it’s more likely to be safe. Legitimate brands may use these methods to engage their audience(s), but the key difference is that they won’t ask you to expose personal information publicly.

Fake Contests, Games, Quizzes, and Surveys

Scammers craft their communications for this scam in a way that can be very enticing at first glance. The offer might include free prizes if you participate in a contest or giveaway, usually requiring you to post some sort of personal information. This tactic gives scammers just enough details to help them target you for future scams. Offering additional chances to "win” a prize for each person you invite to join you might tempt you to unwittingly involve your family and friends in a social media scam as well.

One hot scam trend today involves fun memes that prompt you to post information about who you are, your interests, or where you live. For example: "Post your age, street name, and the last thing you ate to get your performer name.” Once you’ve provided this information, you’ve given a potential scammer access to your personal information, which could then be used fraudulently.

The best defense here is not to click or comment on posts by people or brands you don’t fully trust. If a contest or giveaway shows up in your feed from the verified account of a reliable brand or individual you know, it’s more likely to be safe. Legitimate brands may use these methods to engage their audience(s), but the key difference is that they won’t ask you to expose personal information publicly.

Discounted or "Free" Gift Card Offers

You may see offers for free or discounted gift cards on social media, especially around the holidays. Unfortunately, there is often no easy way to tell if you’re buying a legitimate card, so the safest bet is to purchase gift cards directly from the vendor's website or physical store location (if possible).

Also, be cautious of anybody selling you a product on social media that insists you pay with a gift card or prepaid credit card. Because these cards are often untraceable, they are a preferred payment method for social media scammers. A legitimate seller will never pressure or require you to pay with a gift card.

Fake Deals and Coupons

This type of scam involves diverting social media users from the platform and onto illegitimate websites by linking to fake deals and coupons. Beware — when you click on one of these links, you are usually directed to a phishing site, or you’ve unintentionally activated malware to the device you are using.

A phishing site is built to look credible and might request you to input your email address, username, and/or passwords. This information can then be used to hack your personal accounts, or might even be sold on the dark web to other hackers. The bottom line is to never click on unknown links or ads, unless you are fully certain that it is credible.

Advance Fee Schemes

Advance fee schemes target investors who have already made costly investment mistakes. If you’re holding an investment that is performing poorly, a fraudster may reach out to you with an offer to purchase your investment at a price that far exceeds its value. For this scam to work, fraudsters will require you to send them an "advance fee” to pay for the purchasing service.

How to Protect Yourself From Social Media Scams

Now that you know some of the things to look out for, here are some simple things you can do to protect yourself from becoming the victim of a social media scam.

Secure Your Social Media Accounts

Make sure your social media accounts are set to private and, whenever possible, use two-factor authentication. Two-factor authentication adds an extra layer of protection to your accounts and is offered by most social media platforms. It’s a verification process in which you are notified if someone tries to access your account from an unfamiliar device. Notifications are sent via email or text and prompt you to enter a code in an effort to prove that you are indeed the person trying to access your account.

Do Your Research

Don’t be too quick to hit the "buy now” button. If an advertisement catches your attention, take some time to research company making the offer. An online search of the seller is a good starting point to figuring out their credibility.

Almost anyone can build an ad and post it on social media, but most legitimate businesses will have an established online presence to back it up. If you find that it’s difficult to tell if a company is credible, it’s best not to take a chance. Look for a similar product or service from a company that you know you can trust.

Most social media platforms follow a process to "verify” the accounts of brands, businesses, or even governments. Establishing verified account status takes time, effort, and engagement with a large audience. Social media scammers would very likely find it difficult to navigate through the process to receive the approved blue checkmark (certifying verification), so when you see it, you can feel confident that you’re dealing with a legitimate entity.

Use a Safe Payment Method

When shopping online, credit cards are one of the safest ways to pay. Credit card companies use encryption technology and monitoring systems with the intent of keeping your personal and account information protected.

Many credit card issuers will catch fraud (often before you do) and automatically freeze the account. When fraudulent activity occurs, credit card companies are legally required to offer zero fraud liability on purchases over $50 to their customers. This means you will be not be responsible for any fraudulent charges over this amount once they've been identified.

A debit card also has a monitoring system in place; however, the same zero fraud liability is often not found with these types of cards. However, if you are able to report your card lost or stolen before any unauthorized charges are made, then you won’t be held liable for fraud under the Electronic Fund Transfer ActOpens in New Window. Note that if you report your card lost or stolen within two business days of a fraudulent charge occurring, you may be liable for up to $50. Your liability generally goes up the longer you wait to report your card lost or stolen.

What to Do if You Think You've Been Scammed

Knowing how to identify social media scams ahead of time as you navigate the holiday season is the best way to prevent becoming a victim. Understandably, even the most cautious consumers can still fall prey to a scammer.

If you believe you have been the victim of a social media scam, report the fraud to the state you reside in.Opens in New Window Additionally, if you have lost money, file a report with your local police department, as well as your card issuer and/or bank, so that they can work to restore your account. Finally, if you fall victim to a scam on social media or any other online source, report your case to the IC3. The IC3 tracks internet-based scams, whether they originated in the U.S. or abroad. Any identity fraud that results from a social media scam should also be reported to the FTC.

Social media platforms have an enormous amount of activity to monitor and can’t possibly manage it without their users' help. Flag any scam ads or accounts, so that administrators can deactivate them before they are able to take advantage of others.

Better Protect Yourself by Partnering With Lafayette Federal

At Lafayette Federal Credit Union, we are committed to protecting your security by helping to safeguard your money and your identity. Contact usOpens in New Window to learn how we can work with you to boost your financial well-being.

Not a Lafayette Federal member yet? You can become a member by completing an online membership applicationOpens in New Window.

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