In today's digital age, social media platforms have become hotbeds for scammers looking to exploit unsuspecting users. We spoke to our Head of Fraud Operations Anthony Gudgeon on the key red flags your customers should be watching out for when interacting with sellers on social media.
The telltale sign of a scammer
One of the first things to check when assessing a social media account's legitimacy is its age. Scammers often create new profiles specifically for fraudulent activities. A study by Lloyds Bank1 revealed that romance scams, which often originate on social media, rose by 22% in 2023 compared to the previous year. Many of these scams were perpetrated using newly created profiles.
This issue has become so prevalent, that programs like Meta’s Fraud Intelligence Reciprocal Exchange (FIRE)2 have started to partner with banks to identify and remove fraudulent accounts. The initiative has already led to the removal of thousands of scam profiles, showcasing how collaboration can make social media safer
Consistency is key
Advise your customers to take a close look at the account's selling history. Legitimate sellers typically have a consistent pattern of activity and accumulate reviews over time. Be wary of accounts with sporadic selling patterns or a lack of reviews, as these could indicate fraudulent behaviour.
With the rise of 'finfluencers', influencers suspected of promoting online scams, the UK’s Financial Conduct Authority (FCA) has been working to raise awareness of the issue3. They emphasise the importance of transparency and accountability, and have been working to educate users about the dangers of engaging with accounts that exhibit red flags like inconsistent selling activity.
If it seems too good to be true
Your customers should be cautious of accounts selling high-value items at suspiciously low prices. This is a common tactic used by scammers to lure in potential victims. According to the Federal Trade Commission, reports of scams which involve fake "too good to be true" offers, have increased more than eightfold since 20194.
By keeping these red flags in mind, your customers and end users can significantly reduce their risk of falling victim to a social media scam.
At Thredd, we’re here to support you in educating your customers and mitigating risks across the digital landscape. Don’t hesitate to reach out to discuss how we can help.
Sources
1. Lloyds Bank - "Romance Scams Rise by 22% in 2023" Lloyds Bank
2. Federal Trade Commission - "Sextortion Scams Increase Eightfold Since 2019" FTC
3. Meta - "Meta Partners with UK Banks to Combat Scams" Meta
4. FCA - "FCA Warns Against Influencer-Backed Fraud Schemes" FCA
