Fake companies abound on social media

One of the ironies of social media today is that while Facebook and other social media companies automatically slap a challenge notice on fake news, their own advertising is often fake, with no such fact check in sight.

Advertising fraud on social media takes a number of forms: Brand theft, product misrepresentation, and fake reviews, to name just a few.

Social media users are ripe for the picking. Facebook is one of the largest superstores in history, with billions of shoppers and millions of small businesses pitching products. Small business ad revenues, nearly $70 billion a year in advertising for the company.

The fact is if you have a few bucks, you can advertise on Facebook and no one will look into your business at all.

According to an FTC study, 94 percent of scam victims said they saw an ad on Facebook or Instagram.

Brand theft is an old scam that finds new life on Facebook.

Advertisers use the pictures from real products and then claim you can order them at prices well below retail. Clothing is often fraudulent. If you went to your favorite clothing store and saw a brand name nightgown for sale at $60, you then have an electronic cookie on your computer. When you go to Facebook, you will likely see the same photo of the same nightgown advertised on a Facebook ad for $20. The difference between the two? The Facebook ad is a fraud, and you won’t get the product, it won’t be the same product, or the site will contain a worm or virus that steals your credit card info. Using PayPal doesn’t help. In fact, one hint of a scam is the store takes only PayPal.

Meanwhile, the fake company will list hundreds of positive reviews. Beware. These reviews are often solicited. Users get an email that says: Give us a positive review and we will send the product free. After the review is submitted, reviewers never receive anything.

According to Time Magazine, scammers set up dozens of companies with silly double or triple-word domains. Some examples from the Time article: ByDivStore.com, BoldWon, GoShoes.

According to Buzzfeed and Time, most of the clothing scams originate in mainland China.