Cybersecurity Scams: Rising Social Media Threats to Businesses

Over the last 20 years we have seen the rise of social media platforms like Meta, what started out as a place to network with friends and family has now become an indispensable tool for small and large businesses around the world.  It offers a platform to engage with customers, promote products, and build brand loyalty.

However, with the increasing reliance on social media, Americans and their small businesses are becoming prime targets for cybersecurity scams. By not understanding the signs of the types of cybersecurity scams, you, your family, and your clients could be getting scammed out of billions. According to the Federal Trade Commission, Americans lost $2.7 billion to scams that originated on social media between January 2021 and June 2023. These scams can have devastating consequences, from financial losses to reputational damage.

Account Takeovers: A Growing Concern

One of the most alarming types of social media cybersecurity scams is account takeovers. Small business social media accounts can be hacked through various methods, such as phishing, weak passwords, or exploiting vulnerabilities in the platform. According to Irina Tsukerman, a US national security lawyer and President of Scarab Rising, Inc, “On average, 1.4 billion social media accounts are hacked every month; that number will continue to rise as more and more people create social media accounts.” This can lead to unauthorized posts, messages, and even financial transactions, severely impacting the business’s reputation and operations.

Types of Cybersecurity Scams

1. Social Media Phishing Attacks: Cybercriminals often use social media to launch phishing attacks targeting small businesses. They create fake profiles or pages that mimic legitimate businesses to trick employees into revealing sensitive information such as passwords, credit card numbers, or personal details. For example, an employee might receive a message from what appears to be a trusted vendor asking them to verify account details, leading to a security breach.
2. Email Phishing: In addition to social media, email phishing remains a significant threat. Scammers send emails that appear to be from legitimate sources, such as business partners or service providers, to trick employees into clicking on malicious links or providing sensitive information. For instance, an employee might receive an email that looks like it’s from their bank, asking them to update their account information, which then leads to a phishing site.
3. Malware Distribution: Scammers may use social media platforms and email to distribute malware targeting small businesses. This can happen through malicious links or attachments in messages, posts, or advertisements. Once the malware infects a business’s system, it can steal data, monitor activities, or even take control of the business’s network. For instance, an employee might click on a seemingly harmless link in a social media post, inadvertently downloading malware that compromises the entire network.
4. Impersonation: Cybercriminals may impersonate a small business or its employees to deceive customers or partners. This can lead to unauthorized transactions, data breaches, and loss of trust among stakeholders. For example, a scammer might create a fake social media profile of a business owner and use it to solicit payments or sensitive information from customers, damaging the business’s reputation.
5. Social Engineering: Scammers use social engineering tactics to manipulate small business employees into divulging confidential information. This can include pretexting, baiting, or tailgating, often exploiting the trust and familiarity built through social media interactions. For instance, a scammer might pose as a new client on social media or through email, building a relationship with an employee and eventually convincing them to share login credentials or other sensitive information.

Impact on Small Businesses

1. Financial Losses: Falling victim to a cybersecurity scam can result in significant financial losses. This can include direct theft of funds, costs associated with mitigating the breach, and potential legal fees. Approximately 60% of small businesses that fall victim to cyberattacks go out of business within six months (Cybersecurity Ventures) .
2. Reputational Damage: Trust is a crucial asset for small businesses. A cybersecurity breach can erode customer trust and damage the business’s reputation. Negative publicity and loss of customer confidence can have long-term effects on the business’s success.
3. Operational Disruption: Cybersecurity incidents can disrupt business operations. This can range from temporary downtime to complete shutdowns, affecting productivity and revenue generation.
4. Legal and Regulatory Consequences: Small businesses may face legal and regulatory consequences if they fail to protect customer data. This can include fines, penalties, and increased scrutiny from regulatory bodies. Cyber insurance plays a crucial role here, as it can help cover the costs associated with legal fees, customer notifications, and regulatory fines. It also provides access to expert resources to guide businesses through compliance and recovery processes.

Mitigating the Risks

1. Employee Training: Educate employees about the common types of social media scams and how to recognize them. Regular training sessions can help employees stay vigilant and avoid falling victim to scams.
2. Strong Security Measures: Implement robust security measures such as multi-factor authentication, strong passwords, and regular software updates. These measures can help protect against unauthorized access and malware infections.
3. Monitoring and Response: Regularly monitor social media accounts for suspicious activities. Have a response plan in place to quickly address any potential threats or breaches.
4. Customer Awareness: Inform customers about the potential risks of social media scams and how they can protect themselves. Encourage them to verify the authenticity of communications and report any suspicious activities.

As small businesses continue to leverage social media for growth and engagement, it is crucial to remain vigilant against cybersecurity scams. By understanding the types of scams and their potential impact, businesses can take proactive steps to protect themselves and their customers. Investing in cybersecurity measures and fostering a culture of awareness can help small businesses navigate the digital landscape safely and securely.

Citation:

Federal Trade Commission. “FTC Data Shows Consumers Report Losing $2.7 Billion to

Social Media Scams Since 2021.” Federal Trade Commission, 6 Oct. 2023,

www.ftc.gov/news-events/news/press-releases/2023/10/ftc-data-shows-

consumers-report-losing-27-billion-social-media-scams-2021.

Techopedia. “Cybercrime on Social Media: A Global Identity Problem.” Techopedia, 19 Mar.

2024, www.techopedia.com/cybercrime-on-social-media-a-global-identity-

problem.

Cybersecurity Ventures. “60 Percent of Small Companies Close Within 6 Months of Being

Hacked.” Cybersecurity Ventures, www.cybersecurityventures.com/60-percent-of-

small-companies-close-within-6-months-of-being-hacked/.