Financial fraud isn’t a new concept by any means, but in the age of the internet and social media, the general perception is that scams that rid you of your money only primarily affect the older generations. There’s tons of info about spreading awareness to your parents and grandparents about not believing those suspicious phone calls telling them they owe money to the government or falling for the pop-up on a website that tells them to contact “Microsoft” because their computer is compromised. While Millennials are perhaps savvier about these types of scams, it doesn’t mean that they never fall victim to financial fraud.
A 2019 poll commissioned by Scotiabank found that 55% of people aged 18-34 had been a victim of financial fraud. In the US, the federal trade commission reports that American Millennials, which are persons born roughly between 1980-1994, are 25% more likely to report losing money to fraud than those 40 and over. Across North America, a 2018 Better Business Bureau report states that while Millennials typically lose less money than more senior generations, they are much more likely to experience fraud, especially with online purchases. As a Millennial myself, these numbers provide a stark reminder that financial fraud can happen to anyone and that even tech-savvy Millennials are not immune to its effects.
With this information in mind, how can someone in the financial services industry help their millennial clients with financial fraud, in both prevention and help if they’ve been a victim? We reached out to fraud subject matter expert Caroline Dixon for some more insight and compiled online resources for further reading and support.
How can Millennials Protect Themselves Against Fraud?
Millennials tend to be more tech-savvy compared to older generations, and as a Millennial myself, I’m so comfortable with technology that I’ve integrated it into pretty much every part of my life. “I think because Millennials have grown up in such a digitally connected world, it has become the norm to always be online and share everything you do”, says Caroline Dixon. And I get what she means: even while I try to be careful about where I enter my personal information online, there’s always the potential to make mistakes, especially as fraudsters become more sophisticated with their methods of obtaining information. “Perhaps these individuals don’t think too skeptically about who they are communicating with and sharing information with because it has become such an everyday normal way to act and communicate,” Dixon continues. “It is really important to slow down, think things through and believe that (unfortunately) there are a lot of bad people out there that could use this information to commit fraud and steal your identity.”
The insight from Dixon makes sense: you should be mindful about what information you’re sharing online, and where. While the end goal might be getting your money, the ramifications of things like identity theft can be much more damaging for a victim over the long term than losing funds. Dixon also suggests keeping up with the latest trends on fraud to stay vigilant. “Talk about fraud with your friends and family...so you all know what to look out for.”
It’s good advice. After doing some searching, I found a resource that the Canadian Government created called The Little Black Book of Scams. This eye-opening resource provides some great advice for avoiding scams. One of the “golden rules” in the book is particularly relevant, suggesting that any time an offer involves money, personal information, time, or some sort of commitment, you should seek independent advice. While “independent advice” could mean asking a friend or family member before moving forward, a trusted financial services professional can also be on that list of people to ask. If you have a good relationship with your client, they should be encouraged to seek your professional opinion before agreeing to an offer or a deal.
Other advice in The Little Black Book of Scams includes visiting a website directly to log in rather than clicking a link in an email (banking, for example), and doing your own research and investigation into a company before moving forward with any deals or opportunities, such as employment. Even glowing company reviews can be deceiving since they can easily be faked, so it’s important to take the time to do your homework before entering into something you might regret later.
What are Common Types of Fraud?
“These days, phishing attacks are the most common type of cyber/fraud attempts that we see,” says Dixon. “This involves receiving unsolicited emails (or texts) from individuals or groups that pretend to be someone else with the hope of you clicking a link within the email or opening an attachment. For example, I received one recently that appeared to be from Canada Post but was not, with a link to track my parcel,” Dixon continues.
“Similarly, we have all probably seen the recent emails and texts pretending to be from CRA and to click to get our COVID benefits deposited. Again, the aim of the fraudsters here is to gain access to your systems and steal personal information, banking or credit card data; whatever they can get their hands on really.”
Along the topic of being careful about clicking unfamiliar links, I asked Dixon about social media ads since many sources I came across online seem to suggest that Millennials are particularly susceptible to buying from the malicious sites these ads sometimes link to. Dixon offers the following advice if you want to buy something from one of these ads: “If there is something that interests you, don’t click on the link that pops up but open up a separate browser window and search for the item or webpage to find the legitimate site, in case the pop-up ad was not legitimate.”
How Can I Get Help if I’ve Been a Victim of Fraud?
If you’ve been a victim of fraud, it can be an overwhelming and embarrassing enough experience that your first instinct is to hesitate in getting help. If you have fallen victim to fraud, however, the Canadian Anti-Fraud Centre suggests taking time to collect your thoughts, and then gather as much information as possible, including things like documents, emails, texts, and phone records, and then contacting the appropriate third parties to let them know what happened (your bank, the police, etc.). These institutions should be able to help you proceed in the best way possible.
If you’re a financial services professional, your client will most likely contact you for support. It’s important to have empathy for their situation and not judge or blame them for their actions. Instead, focus on how you can help them move forward by assisting as much as you can with steps to getting them in good financial standing, and then provide them with resources and advice so the situation doesn’t repeat itself in the future.
Millennial Financial Fraud
Although many people think that younger people are somehow less susceptible to fraud, the truth is that fraud can affect anyone, regardless of their age or the generation they belong to. Financial services professionals need to be aware of all types of fraud that can affect their clients and be able to provide advice and support to their clients in both prevention and managing circumstances if a client becomes a victim of fraud.