The scams are creeping into your newsfeed, your ads, your offers … and so, think twice before the retweet, perhaps.
The Federal Trade Commission (FTC) said in a recent Consumer Protection Data Spotlight that social media and app-driven scams have more than tripled in the past year — as measured by the first six months of 2020 — with a sharp increase seen in the second quarter.
Total reported losses for all of 2019 for those types of fraud totaled $134 million, said the FTC, but through the first six months of this year reported losses reached $117 million.
“In that time, the reported scams that started on social media often related to online shopping, romance scams, and supposed economic relief or income opportunities,” said the FTC.
Drilling down a bit, the commission said eCommerce sites that did not deliver items that had been purchased were among the scams most often reported. In addition, consumers mentioned Facebook or Instagram in 94 percent of the reports that identified specific platforms. Also on the rise: scams that offer grant money to help those in need during the pandemic.
And in terms of fraud directly related to the pandemic, as noted in this space earlier this fall (and where tallies are almost certainly higher since that report), the FTC said more than 200,000 Americans have lost $145 million linked to the COVID-19 pandemic since the start of the year.
To that end, earlier in the week, the FTC debuted a new platform for consumers to report fraud. The platform, ReportFraud.ftc.gov, allows consumers to report issues directly to the commission, with the added feature that the FTC also will offer “next steps” the consumers should take depending on the type of fraud report.
In a statement from Andrew Smith, director of the FTC’s Bureau of Consumer Protection, “every time you report scams or bad business practices to the FTC, you’re helping to protect your community. With ReportFraud.ftc.gov, it’s quicker and easier than ever to share your story, and each report helps the FTC, and other federal, state, and local law enforcement agencies, fight fraud.” The commission said that the new site replaces the FTC Complaint Assistant.
Targeting Restaurants And Other Verticals
The new consumer reporting tool comes as beyond the confines of social media, and as reported by PYMNTS, certain verticals are seeing increased targeting by fraudsters, especially amid the great digital shift wrought by the pandemic.
That’s especially true of the restaurant sector, where mobile commerce, delivery and curbside pickup have been hallmarks of that shift.
“With digital transformation, payments are going card-not-present, whether it be an online order for delivery, mobile order-ahead or even ordering from within the restaurant via a phone app or other method. That shift to card-not-present also shifts the liability,” Scott Adams, vice president of friendly fraud at Kount, told PYMNTS. “Chargebacks are a risk because fraudsters like to test stolen card information with businesses that may be accustomed to multiple small transactions in a row and that also don’t have time for a manual review process.”
In terms of consumer protections (added layers of authentication among them), the 3D Secure 2.0 authentication tool should see tailwinds in tandem with the continued embrace of eCommerce, according to PAAY Chief Financial Officer Brian McCutcheon, as noted in a recent PYMNTS interview.
“The EMV 3DS is uniquely qualified to help merchants keep their chargeback rates down,” McCutcheon said. “[That] keeps them from getting in trouble with the card brands, and obviously avoids the significant costs that come along with fighting, investigating and resolving chargebacks. At the end of the day, it’s kind of a low-priced piece of technology to fight what can be a very expensive issue for merchants.”