Yahoo Finance 4 Ways Millennials Can Avoid Online Financial Scams
If you're in your 20s and 30s, you may think you're less vulnerable than seniors to fall for online financial scams.
But the numbers say otherwise. According to the Federal Trade Commission's annual data summary of consumer complaints released in March, 40 percent of Americans between ages 20 and 29 reported losing money to con artists in 2017 compared to only 18 percent of people 70 and older.
Perhaps unsurprisingly, the FTC study revealed that senior citizens tend to lose more cash than millennials after being swindled. The median dollar amount that 20-somethings lost in 2017 was $400; people in their 70s lost a median of $621; Americans ages 80 and older lost a median of $1,021, according to the FTC.
[See: 10 Ways to Protect Yourself From Online Fraud.]
For a refresher on how to recognize an online financial scam -- and avoid leaving yourself vulnerable to fraudsters -- here are a few things to keep in mind to protect yourself.
1. Look out for new twists on old scams. You're probably familiar with the "Nigerian prince scam" in which a con artist would email you, pretend to be a royal member of a Nigerian family and request money to be transferred. Typically with the scam, the fraudster would ask you to help him get his money out of the country by sending over your personal information in return for a generous payment.
While you may think you're impervious to falling for that trick, you might be surprised. Rene Kolga, senior director of project management at Nyotron, a cybersecurity firm based in the San Francisco Bay Area, says "there is a current scam out that is an interesting spin on the 'I'm a Nigerian prince and have millions of dollars to share with you' email." According to Kolga, "This one updates it by impersonating real people, such as a NASA astronaut or government officials, who you can easily find online. The scam uses their real names, photos and facts about their life to spin a story about how they found a massive amount of money and have kindly chosen you to receive the funds."
To protect yourself, Kolga suggests asking yourself some important questions, including: How did this person find my contact information? Does the story actually make sense? Why would an astronaut or government official choose to give me money?
2. Remember: Identity thieves love social media, too. You'll want to stay cognizant of fraudsters across social media accounts, such as Twitter and Instagram.
Mark Gazit, CEO of ThetaRay, a provider of artificial intelligence-based big data analytics solutions, says that a recent scam making the rounds on social media channels invites you to answer questions like, "Who is your best friend?" or "What was your first pet's name?"
"The problem is that these are actually security questions that banks ask new customers when they open accounts. So when you answer these questions online, criminals can use the information to open new accounts or lines of credit in your name," Gazit says.
[See: 10 Things Everyone Should Know About Money.]
3. Keep in mind: Sometimes scammers use automated software or AI. While the scam may be real, the person you're communicating with may not be.
"Many people think scammers sit at home and manually send out emails to hook in unsuspecting people," Gazit says, "but the reality is that criminals -- including organized crime groups and even governments -- have automated their scams and are using artificial intelligence and machines to do the dirty work for them." According to Gazit, "Ransomware is a perfect example of this. People think that criminals are sitting behind computers, sending out ransom notes and holding victims' data hostage until they pay a ransom fee, but it's actually done by software that scans computers and chooses its victims."
In fact, ransomware has affected businesses, schools and government organizations. Recently, Atlanta's city government was impacted when five of the 13 local government departments were unable to function due to ransomware. And, of course, it's been heavily reported that AI has been utilized with Russian social chatbots, which are designed to automatically spread misinformation throughout social media websites.
4. Look out for fake invoices. You might think you'd never pay a fake invoice, but think again. Consumers have far more subscriptions than they used to. You might be paying every month for movies, music, video games, an online dating service or monthly subscription boxes, where you receive, say, beauty products, food or children's toys every month. And this is in addition to monthly bills you have to pay, such as your utilities and rent. It would be very easy to receive a fake bill and believe it's real.
Holly Reisem Hanna, an entrepreneur in Austin, Texas, who runs a website called TheWorkatHomeWoman.com, says that a few months ago she received an invoice from what looked like Apple iTunes.
"It was a bill for $400 in gaming credits. I about flipped my lid," Hanna says. "I was out of town and immediately called my daughter to see if she had accidentally purchased some gaming coins. She swore up and down that she hadn't."
So Hanna studied the invoice and noticed that while the bill looked authentic, the email clearly didn't come from Apple. Before you pay a bill that you receive online and have any doubt about, take a hard look at it. You can always look for the customer service number -- use a search engine to find it, not what is listed on the invoice -- and give the company a call if you are concerned about whether or not it's real.
"Had I clicked on the link within the email, the scammer could have gotten access to my personal information," Hanna says, adding that she frequently receives fake invoices through email supposedly from places like PayPal, the IRS and banks.
[See: 9 Financial Tools You Should Be Using.]
To try to protect yourself from fraudsters, security experts often advise using virtual private networks rather than public networks, changing your passwords often and ensuring your virus protection software is always up to date.
If you are a victim of an online financial scam, there are a few things you'll want to do. First, call your bank, credit card or financial institution for assistance. Then, file a fraud victim statement with the three main credit bureaus (Experian, Equifax and TransUnion). You may also want to freeze your credit to prohibit a fraudster from taking out a loan in your name. Finally, call the police and file a report.
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