Millennials more vulnerable to scammers than older people, says new study: Internet Scambusters #724
Surprise, surprise -- young adults who make up the millennial generation are more at risk of falling for a scam than their elders.
The reason? They, and some other groups such as well-educated professionals, are over-confident that they won't get caught out.
But they will. In this week's issue, we explore a new study of scam vulnerability -- with some useful advice on how to curb the risks.
Let's get started...
Millennials Face Greatest Risk of Being Scammed
People who think they're too smart to be scammed -- like the millennial generation and well-educated professionals -- often turn out to be more vulnerable than the rest of us.
That's because the social groups who are regarded as the biggest target, mainly older folk, receive so many warnings about scams that they're much more likely to be on their guard against the tricksters.
Now a new study has confirmed this perception by suggesting that millennials -- people who became adults around the turn of the century -- and middle-aged people (those age 45 to 54) are, in fact, more likely to fall for a scam than their elders.
According to the study by the Institute of Marketplace Trust, millennials suffer from what's called "optimism bias" -- the belief that others are more likely to be scammed than we are.
"Seniors may be the one group that does not suffer from optimism bias when it comes to scams," says study co-author Rubens Pessanha.
"They've heard, loud and clear, that they are at risk. Seniors may very well be more scam savvy than others. They are also less impulsive buyers than younger consumers, and less likely to be making purchases online where so many scams take place."
Another co-author, Emma Fletcher, added: "We've bought into stereotypes about scam victims -- they're usually seen as vulnerable and elderly, or gullible and poorly educated.
"These stereotypes are strongly held... and they are wrong. We are all at risk, but younger and more educated individuals are actually the most likely to be scammed."
Other research suggests that people in the 25 to 34 years age group are three times more likely than seniors to fail to spot a scam and to lose money as a result.
The study of 2,000 respondents found that falling for an effective sales technique was regarded as the most likely cause of a scam, followed by believing imposters who pose as a business or individual that the victim knows or trusts.
Ignorance about scams, failure to do background research, and a sense of urgency were also causes of people failing to spot scams.
With scams now affecting one in four households every year, costing more than $40 billion annually, the report says the risk of being scammed is four times greater than the combined total of violent crime, burglary, larceny, and auto theft.
"Behind these numbers are people who are harmed both financially and emotionally -- homes are lost, finances are devastated, hearts are broken, and trust is violated. But individuals are not the only victims," the authors say.
"Ethical businesses that strive every day to do the right thing rely on the marketplace to operate by a playbook where fair and honest practices are rewarded. Scammers break these rules, unfairly gaining the upper hand."
So what's to be done?
Older folk receive scam warnings almost every day but the messages often miss younger groups, and the very fact that they don't know about some scams leaves them open to the con tricks.
The Institute suggests three key actions could help reduce the scam risk.
First, victims should be encouraged to report when they've been scammed because research tells us that victim experiences are the most powerful way of alerting others to the risk, on the basis of "If it can happen to them, it could happen to me."
Second, those responsible for educating consumers must warn and teach people about their optimism bias, encouraging them to be alert to the real risks they face and showing them how to avoid scams.
Finally, says the report, raising awareness of different types of scams and knowing how the crooks operate before they actually attack could significantly reduce their success rate.
One of the effective ways of achieving these targets is through the regular alerts issued by consumer guardian groups like Scambusters.
If you're a regular reader, you're already heading in the right direction. But you can also help others by sharing this and all our weekly newsletters with people you care about.
As one victim recently told the Detroit Free Press: "As millennials, we kind of think we're solid on everything, especially with technology. We think we know and we can judge what's legit and what's not, especially with computer scams.
"We think we know what we're talking about all the time, because we grew up with it. Maybe it's not a good thing. Maybe it's good to be skeptical."
Alert of the Week
What should you do if the phone rings and you lift the receiver to hear a recorded sales message?
Hang up! And report it to the Federal Trade Commission (FTC).
Hanging up on robocalls is one of the things the FTC recommends in their recently published Top 3 Ways to Avoid Fraud.
"These calls are illegal. And plentiful," says the Commission. "Don't press 1, 2 or any number to get off a list or speak to a person. That just means you'll get even more calls."
The other two tips in the Top 3: Don't trust your caller ID and always talk to someone you trust before handing over money or information.
That's all for today -- we'll see you next week.