Young people tend to think they're smarter than their parents and especially their grandparents. But, according to the Federal Trade Commission (FTC), last year Americans in their twenties lost more money in financial scams that those over seventy years old. More specifically, 40 percent of millennials indicated that they lost money to fraudulent schemes compared to the 18 percent of older consumers (those 70 and older) who reported that they lost money as a result of fraud.
Of note, however, is the fact that the median loss for those 20-29 years old was $400, while the median loss for those in their 70s was $621 and those in their 80s or older was $1,092.
Common Financial Scams
There are several ways that financial scams can occur. One common crime is identity theft, which occurs when a person using someone else's identifying information to commit other crimes.
For example, a person may use someone else's personal information to open a credit card or apply for a loan. Another type of common financial scam is debit or credit card fraud. This can occur as a result of someone hacking a computer or server to obtain credit card information or using a scanner or other device to steal credit card information from the physical card.
Why Are Millennials More Exposed to Financial Scams?
The FTC findings didn't indicate why millennials were more affected by financial scams than older generations. However, considering millennials' dependence on technology, it's not too surprising that they would make up a larger percentage of those affected by financial scams.
For example, millennials are more likely to use credit cards to make purchases than people in their 70s. Millennials are also more likely than their elders to purchase goods and services online. While convenient, habits like these leave millennials more open to the risk of falling victim to financial scams.