Social Engineering is the ability to manipulate a person into giving you personal or sensitive information.
Criminals use Social Media sites to pass off fraud schemes such as investment dealings. They create pages that seem legitimate but are actually traps to entice possible investors.
Criminals use Social Media to steal personal information such as logins and passwords from people in an attempt to commit identity theft. The primary method used is to send fraudulent links across followers/friends of an account in hopes of people clicking on the link which will then log the password and login of those users.
Companies use Social Media to collect vast amounts of data from the people using the sites. This information is then sorted and used in identity theft and other fraudulent schemes.