New York ranks as one of the top states for online scams, according to a new report.
A Consumer Federation of America report finds state consumers lose $6.5 billion a year – or $325 per person – to scams. It notes Facebook, Instagram and WhatsApp are the top sites for scammers.
However, new state legislation would prevent bogus advertisements from suckering people in. The bill’s co-sponsor, Sen. Andrew Gounardes, D-Sunset Park, said these sites should have to verify that their advertisers exist.
“They have to have a real name or organization,” he said. “They have to have a physical address. There has to be a phone number. There has to be some type of tax ID or other type of financial identification so you know exactly who you’re dealing with.”
He said people who’ve lost money to these scams would be able to file a complaint with the social media site itself. Data from New York Attorney General Letitia James finds online scams receive the second-highest amount of complaints behind retail scams. The bill is under review by the state Senate’s Internet and Technology Committee.
Eradicating these scam ads could be met with some resistance because social media sites make money from advertising revenue, legitimate or otherwise. New York Assemblymember Alex Bores, D-Upper East Side, another co-sponsor of the state bill, said it’s time to establish clear rules for social media sites that are turning a blind eye to scams.
“There will always be a profit motive to not fully pay attention,” he said, “and we want to eliminate that motive. We want to make a clear baseline for all of the platforms, so they’re all on the same equal footing of the responsibilities they have to their users and all of us.”
Nationwide, consumers lose about $119 billion to scams each year, although the report estimates the true cost of online scams is more than seven times higher than what was reported to the FBI’s Internet Crime Complaint Center.
