When it comes to scams, millennials are a bulls-eye target for con artists.
In fact, millennials are the most at risk to lose money from a scam than any other age group of consumers, according to a recent report from the Better Business Bureau.
Some 37% of individuals 18 to 24 who reported scams at BBB Scam Tracker lost money, with a median loss of $200, with fake checks being the riskiest scam type. About 30% were people 25 to 35 who fell for the scam they reported, with a median loss of $227. The biggest risks for those folks were employment scams.
The findings come from the 2016 BBB Scam Tracker Annual Risk Report, published in March by the Better Business Bureau Institute for Marketplace Trust. The report was based on the more than 32,000 reports made to BBB Scam Tracker last year in the United States and Canada.
Scams are big business
Scams are responsible for sucking some $50 billion out of the nation’s economy and affecting one in four households and one in five individuals each year, the BBB reports.
Interestingly, the report showed that millennials are more likely to be scammed than baby boomers. Though seniors typically lose more money than millennials when scammed, they fall for scams much less often.
The BBB Risk Index measured risks in three areas: exposure, how likely are people to be exposed to the con; susceptibility, if exposed, how likely are people to lose money; and, monetary loss, if people do lose money, how much money is it likely to be.
Overall, the top five riskiest scams were in the areas of home improvement, fake checks and money orders, employment, online purchases, and advance fee loan scams.
Millennials are at a higher risk
People 18-24 are most susceptible to fake check scams because they are just entering the workforce, often with limited financial literacy, says Doria Lavagnino, president and co-founder of CentSai, a New York-based financial wellness platform for millennials.
She added they may not know the ins and outs of how banks work—a reason financial literacy is super important.
Lavagnino added that hiding in a complex fine print, taking charge of one’s bank account has always been a problem.
Now, with so many digital platforms, millennials have to be very careful who they are sharing their private data with. She noted that Social Security numbers, bank accounts, and income are types of valuable personal information that can be abused by scammers.
“You may not notice immediately, but there are many cases where people discover days or weeks later that their bank account details have passed on to hands who are not supposed to have them,” she says. “Include the internet, where everyone is anonymous, and it’s a recipe for disaster.”
People 25–36 are most susceptible to workplace scams because they are most likely looking for jobs and side hustles. Lavagnino says scammers take advantage of job seekers’ vulnerabilities. She says they often look trustworthy, even using the logo/letterhead of a legitimate company to send a fake job offer.
“The recipient thinks it is real and ends up providing personal details,” Lavagnino says. “Or they say you are hired on the spot but need your money for online training.”
Ways to protect yourself
The good news for millennials is there are steps they can implement to protect themselves from fraudsters. Some very strong suggestions can be found at www.bbb.org/scamtips
What to do:
- Don’t think you’re too smart to be scammed. Fraudsters spend much time conjuring up slick ways to trick savvy consumers.
- Don’t give money impulsively, whether it’s over the phone, in person, or online. If you feel rushed to make a decision, tell the person you need more time. Bounce situations off family and friends for their advice.
- Keep personal details secure.
- Do your research. Identify the newest scams and techniques con artists use.
- Check places like the consumer protection or attorney general office in your state. Nationally, check with places like the Consumer Financial Protection Bureau or Federal Trade Commission.
- Don’t open suspicious emails or pop-ups.
- Never share personal information online.
- Use password protection and change your password every few months on your desktop, laptop, or mobile devices.
- Review your privacy and security settings on social media at least quarterly. Be mindful of what you share on social media.
Jeffrey McKinney is a long-time freelance business writer and reporter, contributing to Black Enterprise magazine for several years on a broad range of business and financial topics.