Security & Fraud

Study: More People Fall Prey To Fraudsters Online Than By Phone

consumer fraud, scammers, online marketplaces, social media

A recent study about how people respond to scammers shows that consumers are more likely to become victims on social media and online marketplaces than over the phone, The Wall Street Journal reported on Sunday (Sept. 28).

A joint study by the Better Business Bureau, the Financial Industry Regulatory Authority and the Stanford Center on Longevity interviewed 1,408 victims of fraud in 2018. Researchers found that the majority of consumers fell prey to scammers on legitimate websites and social media. 

Craigslist and eBay are among the most profitable platforms for fraudsters, attracting people with authentic-looking ads for concert tickets, used cars and more, the article said. The average loss was $600.

On social media, 91 percent of people surveyed said they did not recognize fake advertisements and 53 percent said they lost money. On websites, 81 percent said they interacted with a fraudulent pitch and 50 percent lost money.

By comparison, phone calls — which used to be the most common avenue for scammers — were less successful in cheating people. Only 11 percent of respondents lost money and 39 percent said they interacted with a fraudulent caller. 

People also fell prey to fake emails, with 42 percent of respondents engaging and 13 percent losing money, the study indicated. 

“It could be that our defense may be down or lowered when we are on a site that we choose to visit,” Gary Mottola, research director for Finra Investor Education Foundation, told the WSJ. “It is easier to identify fraudulent activity when it comes through active channels like phone calls where we expect it to come through.”

The FBI’s annual Internet Crime Report released in April indicated that fraudsters got victims to wire money and send gift cards. The gift cards are sold at a discount in exchange for cryptocurrency. Payroll diversion has become a significant form of payments fraud as well — in this case, the bad actors snare login credentials from employees and change direct deposit information.

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