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Your Money: Study shows most online scams start on Facebook, Instagram

A new study from the Better Business Bureau went deep to see just how likely you are to be scammed online, and what the investigator found surprised him.

ST. LOUIS — It may not surprise you to hear that online scams are rampant, but we are now getting a better look at how scams are taking place, and where you might become a target.

Online scams have surged during the pandemic and with supply chain issues, you may have a better chance at falling for one, especially during the holiday season.

If you're scrolling on social media, you might come across an advertisement. There's also a chance it's a real product that's being used as bait by scammers. 

Thieves are targeting social media like never before: actually paying money to companies like Facebook money. They're buying ads that turn out to be fake. 

"Everything looked so real," said Kymberly Talley. 

She responded to an ad for a countertop ice maker on Facebook. 

"And me being an avid ice eater, I just thought the gates of heaven opened up, and I could have my own ice-making machine right on my counter," she said. "I don't have to run to QuikTrip to get ice. I just thought it was an awakening or something."

Talley said she usually goes to the nearby QT to get four cups of ice every day. If you're unfamiliar with nugget ice, it's also sold at places like Sonic and is pretty popular with people who like to crunch ice.

Talley even received a confirmation and chatted with customer service. However, weeks later, she got another awakening, and it wasn't that ice machine. Instead, she got two ice cube trays. 

The scam is so big now, there's even a Facebook group with nearly 2,000 unhappy shoppers

"People in China are spending billions of dollars on advertising on Facebook and Instagram," said Steve Baker, the sole national investigator with the Better Business Bureau. "I'm not saying that all that is false advertising, of course, but a tremendous amount is. It's really, really a massive, massive, massive problem."  

Baker wrote the Better Business Bureau's new national report that analyzed the data of social media scams. Facebook and Instagram users are the major targets. When shoppers lose money online, 70% started on one of those platforms. Of those who never received a product at all, 94% of complaints came from shoppers who started on Facebook or Instagram.

And the data speaks volumes. The amount of online shopping has skyrocketed over the last few years, and the number of undelivered merchandise has risen as well. For example, in 2019, the Federal Trade Commission logged roughly 178,000 complaints that totaled about $104 million dollars. In 2021, it's projected to receive nearly 410,000 complaints with an estimated $394 million in losses.

From pet scams, sponsored links, vehicles scams, and free trial offers, there is no shortage of thieves hard at work. And, it's not just hurting shoppers. Baker said it's mostly scammers using the images and videos from real ads. In Kymberly's case, the ice machine used was a real nugget ice maker that costs nearly $630, but the scammers blurred out the product's logo on the ad, and "sold" it online for less than $30.

Thieves aren't just targeting big brands, they're also targeting small business owners who are artists or craft makers. 

"People whose businesses are affected find these things pop up really fast," said Baker. "It's hard to get Facebook to take these things down, and even when they do, they pop back up again."

Talley lost about $36 in the deal, but that's not the point, she said. 

"First time out and got scammed," said Talley. "But I said, 'No, I'm not gonna settle for this. It's about, you know, just doing what's right--stop scamming people!"

Experts always suggest using your credit card because it's typically easier to get your money back. Bakers says there are actually magic words to use when you tell a creditor you want the payment to not go through. Baker says tell the creditor the product is "significantly not as described" and that should help you get your money back.

Have a money question or problem? Email Michelle Li at mli@ksdk.com

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