Online shopping frauds a top complaint to FTC as pandemic emerged

Are you a foodie? A football fanatic? A fan of Pope Francis? There’s something for everyone on Instagram, the video- and photo-sharing platform that debuted 10 years ago. Be careful, though, because amid the coronavirus outbreak, consumer advocates are sounding an alarm about fraudsters lurking on social media sites including Instagram, which boasts more than 1 billion users worldwide.

Lately there’s been a record-shattering number of complaints to the Federal Trade Commission (FTC) about scams that arise on social media platforms and rip people off for millions. The FTC says online shopping frauds were the most common type of social media scam in the first half of the year; in many cases, people ordered goods that never arrived. Such cases were followed, in descending order, by romance scams and impostor scams involving businesses, people supposedly in need or government agencies.

Among the FTC’s findings:

• There were nearly 16 million complaints about scams that started on social media sites from April through June, and losses of $56 million. The figures reflect a 13-fold increase in complaints — and eightfold jump in losses — compared to the same period in 2016.
• During the first half of 2020, there were nearly 25 million complaints in total with $117 million in losses, compared to $134 million in overall losses last year.

“Scammers go where the people are — or they’re already there waiting for the people to come,” says Emma Fletcher, an FTC program analyst. “Like so many ways that [bad actors] reach people — whether it’s phone, email or text — it’s just another way to reach people without a lot of costs, while being able to remain anonymous.”

Instagram scams range from phony romances to fake jobs

Instagram, based in San Francisco and owned by Facebook, urges users to avoid a variety of scams, starting with romance scams, on its site. Next it lists lottery scams (you’ve won big but must pay a fee); loan scams (an instant note for a small fee paid advance); false investment scams (convert $100 into $1,000); and job scams (misleading or fake posts to steal money or personal data), among others.

Instagram spokeswoman Raki Wane says it takes down accounts that are deemed malicious or break its rules but did not divulge the percentage of accounts held by suspected fraudsters. “We regularly monitor for trends and are always improving our systems to provide a better experience for our community,” she tells AARP. “We’ve removed large numbers of impersonating accounts on a consistent basis through a combination of technology, reporting tools and human review.”

Impersonation predates the internet and runs the gamut: Scammers pretend to be celebrities, influencers, politicians and business executives, she adds.

Some Instagram fraudsters use fake names, and others operate in broad daylight, as recent cases reflect:

• A California actor who played parts in the movies Iron Man 2, Iron Man 3 and Thor is awaiting trial for allegedly peddling a fake cure for COVID-19 and deceiving potential investors. Keith L. Middlebrook, calling himself a “Genius Entrepreneur Icon,” posted videos on Instagram claiming he had an injection to cure coronavirus infections and a pill to prevent them. His posts received more than a million views after only a few days.
• In October, several people were charged in New Jersey for a scheme involving counterfeit economic-stimulus checks purportedly issued by the federal government. The defendants touted the chance for “quick cash” on Instagram and Snapchat.
• In July, a California woman who faked a diagnosis of Hodgkin’s lymphoma was charged for collecting tens of thousands of dollars in donations for cancer treatment she never needed or received. Amanda C. Riley had chronicled her supposed illness in a blog and on Facebook, Instagram and Twitter.

Finally, there’s “Victim One” in upstate New York, the target of a romance fraudster she met on Instagram. She lost more than $250,000 to the man and his associates. The man lied to her, saying he needed money for equipment while he was repairing an oil rig off China. Most of it was money sent by wire transfer; she also gave away iTunes gift cards and electronics.

That case triggered a prosecutor’s ominous forecast. “In our increasingly screen-addicted world, I see these sorts of scams proliferating in the future,” U.S. Attorney James P. Kennedy Jr. of the Western District of New York said last year in announcing that a Georgia woman had been charged in the scheme.

Calls to AARP Helpline

Complaints about Instagram scams during the pandemic also have risen at AARP’s toll-free helpline, 877-908-3360. Among recent calls:

• A New Jersey woman got an Instagram message claiming she’d won an iPhone. Fraudsters took her money, supposedly to activate the smartphone, and hijacked her Gmail account.
• A California man met someone on Instagram claiming to have won $80 million and purporting to want to share some of the money. The victim paid a cash fee but didn’t get a dime in return.
• A Pennsylvania woman sent Western Union transfers to buy a car she spotted on Instagram. The new wheels never arrived. To add insult to injury, the fraudster said she could get some of her money back — as long as she helped scam somebody else.

AARP’s Amy Nofziger, who oversees the helpline, compares scrolling on Instagram to flipping through a magazine. “You can see beautiful artwork, pretty nature. If you like sewing, you can follow people who like to sew as well,” she says. “It’s just an inspiring app.” And, by the way, you can find AARP on Instagram.

The danger, Nofziger says, is when an Instagrammer turns to the site, forms a digital connection with a fraudster and, amid a false sense of community, lets his or her guard down. A shared interest in, say, travel could spark an “instant connection,” she says. But don’t act fast. Don’t let another Instragrammer become an instant scammer.

How to avoid social media scams

Be wary of:

• People you’ve never met in person asking for money.
• People or accounts asking you to claim a prize, or asking for money or gift cards to receive a prize, other winnings or loan.
• A request for a fee to apply for a job.
• Accounts representing large companies, organizations or public figures that are not verified.
• People claiming to be from Instagram security asking for account information (such as your username or password), or offering you account verification services.
• People asking you to move a conversation off Instagram to a less public or secure setting, such as a separate email.
• People claiming to have a friend or relative with an emergency need for cash.
• People who misrepresent where they are located.
• Messages that appear to come from a friend or a company you know asking you to click on a suspicious link.
• Messages or posts with spelling or grammar mistakes.

Be proactive:

• Before you buy something seen on an ad or post, check out the company by typing its name in a search engine with words like “scam,” “complaint” or “reviews.”
• Instagram urges people who buy items off the site to search “About This Account” to learn more about a specific business and see all the ads that it is currently running. “We have layers of review in place to protect our community from fraud and low-quality commerce,” a spokeswoman says.
• If a friend messages you about a way to get financial relief, call the friend first. Did he or she forward the message? If not, tell the friend that his or her account may have been hacked. If the friend did send it, check the offer out before you act.
• Tighten privacy settings to limit what you share publicly.

Reprinted from AARP Fraud Network