When it comes to falling for financial scams, GOBankingRates’ recent Keep Your Money Safe survey found that Gen Z and millennials become victims more often than older generations.
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For example, while 35% of Gen Zers, ages 18-24, and millennials, ages 35-43, admit to being victims of phone-related financial scams, only 25% of Gen Xers, 45-54, admit to the same.
Regarding Social Security scams, 18% of Gen Zers and 11% of millennials admit to being victims. However, only 7% of Gen Xers and less than 2% of those who are baby boomers and older (ages 65-plus) admit to being victimized.
Find out why it’s more common for individuals from younger generations to fall victim to financial scams.
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Why Gen Z and Millennials Become Victims More Often
Brittany Allen, fraud prevention expert and senior trust and safety architect at Sift, said that Gen Zers and millennials, having grown up online, tend to trust digital spaces more than older generations, which can, unfortunately, make them more susceptible to financial scams.
“And their active presence on social media exposes them not only to scams but also to recruitment into fraudulent activities,” she added. “In fact, 34% of Gen Z consumers have encountered offers to participate in online fraud, compared to just 9% of baby boomers.”
Allen said that what adds to the challenge is that younger generations, such as Gen Zers and millennials, tend to be overconfident in their ability to spot scams. Allen said that this leads to a false sense of security, especially as scams become more complex with the use of AI.
“Sift’s research reveals that 81% of Gen Z believe they can spot AI-generated fraud, despite being the generation that’s also more likely to fall for these scams,” she added.
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How Do Scammers Exploit the Online Habits of Younger Generations?
“Because Gen Z and millennials spend so much time online, they tend to have a higher trust in online platforms than older generations, often believing that online services will keep their data safe no matter what,” Allen explained. “This trust can also lead to less vigilance when it comes to securing their accounts. Add in the financial pressures these generations are facing, and the lure of quick money-making schemes, and it’s no wonder they’re more vulnerable to falling for scams.”
Younger Generations Are More Likely To Become Fraudsters
But it’s not only about younger generations falling victim to fraud. Allen said that younger generations are also more likely to commit fraud. She said 42% of Gen Zers admit to engaging in first-party fraud, also known as “friendly fraud,” which involves filing a fraud dispute for a transaction they made even though they received the item and were satisfied with it.
“Additionally, there has been an uptick in professional cybercriminals actively promoting and selling fraudulent tactics on social media platforms, potentially luring regular users into fraud,” Allen said. “Similar to other social media influencers, these ‘fraud influencers’ use their platforms to showcase their success in fraudulent activities to attract and recruit aspiring scammers.”
Tips for Gen Zers and Millennials To Recognize and Avoid Scams
Allen said that if something seems too good to be true, it probably is.
“The best general advice is to be vigilant and verify the legitimacy of any transaction you may be considering, whether it’s sending someone money for an investment opportunity or purchasing a luxury or hard-to-find item that’s heavily discounted,” she said.
Here are some other tips to keep in mind, according to Allen.
Be Skeptical of Unsolicited Messages
“Whether it’s an email, text or social media message, be cautious of unsolicited communications, especially those asking for personal information or money,” Allen said. “Scammers often use these methods to lure victims.”
Verify the Source
Allen said you should always verify the legitimacy of the sender.
“For example, if you receive a message from a bank or a company, contact them directly using official contact information from their website — not the contact details provided in the message,” she explained.
Look For Red Flags
Allen said to be aware of common scam tactics, such as urgent requests for money, promises of large sums of money or threats of legal action.
“Scammers often create a sense of urgency to pressure you into making quick decisions,” she added.
Protect Personal Information
“Never share personal information such as Social Security numbers, bank account details or passwords with anyone you do not trust,” Allen advised. “Scammers can use this information to commit identity theft.”
Use Strong, Unique Passwords
When creating online accounts, it’s important to choose strong passwords, Allen said. She also recommended avoiding using the same password across multiple online accounts. Additionally, she said to consider using a password manager to keep track of your passwords securely.
Enable Two-Factor Authentication
Allen recommended enabling two-factor authentication — aka 2FA — whenever possible.
“This adds an extra layer of security by requiring a second form of verification in addition to your password,” she explained.
Educate Yourself on Common Scams
“Stay informed about the latest scam tactics,” Allen said. “For example, ‘pig butchering’ scams, where fraudsters build a relationship with the victim before convincing them to invest in fake schemes, are becoming increasingly common.”
Be Cautious With Online Transactions
Allen also said that when shopping online, you should use reputable websites and avoid deals that seem too good to be true.
“Check for secure payment methods and read reviews before making a purchase,” she added.
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This article originally appeared on GOBankingRates.com: Why Gen Zers and Millennials Fall for Financial Scams More Often
