ETA Expert Insights: How to Protect Yourself From Scammers & Deceptive Practices on Social Media

By Tom Koski, Beyond Bancard (validated by the CNP & Social Media Working Group within the ETA Risk, Fraud & Security Committee)

This consumer-facing blog is Part One of a two-part series from the Card Not Present & Social Media Working Group within the ETA Risk Fraud & Security Committee. Part Two will focus on considerations that underwriters need to take when underwriting and assessing risks for online merchants.

How often do you find yourself scrolling through social media? A recent study estimates that Americans spend two or more hours per day scrolling through pictures and videos on social media, all while being bombarded by ads. The rise of social media has disrupted every area of business, and we can see this best in the high impact and effectiveness that advertising has had in this space. What initially began as a space for people to gather and connect has become an ideal landscape for advertisers and businesses.

Who are these companies fighting for your attention? Is your information safe with them?

The FTC released a report in October 2020 detailing a substantial increase of complaints during the pandemic from customers who say they lost money to a scam that started on social media. Many customers reported making purchases from ads they saw for a product or service that looked nice online, only to receive low-quality items or knockoffs or, in worse cases, never receiving the item at all.

To fraudsters, social media is an endless opportunity to make revenue — and an opportunity unbound by time. At any point during the day, from anywhere around the world, consumers from every age demographic are searching through content, while companies and people, both good and bad, are sharing and selling content to attract them. You may have seen ads promoting a magical weight-loss pill discovered by a big-name influencer, an employment opportunity as a brand ambassador, an investment opportunity promising a high return, or the opportunity to win a new truck through a random lottery. The list of fraudulent ads goes on, and anyone can be a victim.

How do fraudsters find you? They may use your personal data such as gender, the device ID of your gadgets, or your engagement data, which tracks how you interact with brands online via website visits, clicks, and social media interactions. Fraudsters also target behavioral data, which includes time spent on a website, purchase actions taken, and products searched. Additionally, fraudsters might use attitudinal data that measures qualitative statistics like consumer satisfaction, buying criteria, and how likely you are to purchase a product. Most scams you will encounter will arrive in the form of an ad, but some may also appear as direct messages from an unknown person offering you goods or services.

Fortunately, consumers have many tools and resources at their disposal to combat online sales fraud. One such tool, Scam Tracker, is a platform designed for consumers to report illegal schemes. You can see different examples of consumer-facing fraud-schemes by typing “Instagram” in the search tool on the Scam Tracker website. It is important to note that fraudsters are not always looking for money either; they also look for personal information, which they could use to commit ID theft and which is more valuable to them than stealing $50. It is also important to note that underwriters and payments companies have robust software security and underwriting processes that help keep out the bad actors. Our CNP & Social Media Working Group will be exploring and highlighting all the ways that underwriters and payments companies fight fraud successfully in a later article.

As you browse through social media and find a cute dress or household gadget, how do you keep your information and money safe from fraudsters? After clicking on an ad, review the following tips before you enter your payment details and complete your next purchase.

• Does the ad match the website?
  • The Doing Business As (DBA) matches
  • Product or service same as advertised
  • Price points
• Does the site look official and well-organized?
  • Easy to navigate
  • Clickable hyperlinks
  • Offers a complete description of each product or service
  • Currency display in U.S. dollars
  • Card association logos at checkout
• Is the website SSL secured?
  • HTTPS in the URL
  • Lock icon next to the URL
• Is the purchase a one-time sale or reoccurring?
  • Straight sale
  • Trial and continuity
  • Subscription/membership
    • If requirement, is it a lifetime/recurring payment?
• Are the claims reasonable or too good to be true?
  • Lose 30 lb. in 15 days
  • 100% money-back guarantee
  • Our product cures cancer
• Where is the company located, and can you contact it?
  • Location address
  • Customer support email address
  • Customer support phone number
• Are the terms available?
  • Terms and conditions
  • Privacy policy
  • Return/refund policy
• What are the delivery standards?
  • Delivery method
  • Delivery time frame
• What are others saying about the business?
  • Read the comments
  • Do your own research

If you are still unsure if the company you are looking at is legitimate, you have several alternatives to verify the legitimacy of the business before you make your purchase. One quick way is to use the Secretary of State’s website. The company’s address should point you to the right state. Another way to verify a company is through a basic Google search on the address and phone number. If the company is legitimate and has been around for a bit, it should appear in the search results. Here are several other resources to verify legitimate companies:

• Black Book Online
• Better Business Bureau
• Ripoff Report
• Federal Trade Commission
• Consumer Financial Protection Bureau

Social media is a great payments and sales tool, and many ads and companies use the space as a legitimate marketplace. That said, it is good to be aware of the tricks that fraudsters use to capture your personal and payment information. I hope this helps you navigate social media better and keeps you safe from fraud and ID theft.

For more information regarding ecommerce rules and regulations, visit the FTC’s webpage on “Rules of the Road” for advertising and marketing on the internet.

View social media advertising infographic here.