Millennials are more likely to fall for investment scams than baby boomers

• According to an FBI report, Americans between the ages of 30 and 49 are the most likely to fall victim to investment fraud.
• People in the United States lost $4.57 billion to fraudulent businesses in 2023, most of which was due to cryptocurrency fraud.
• Complaints and losses due to investment fraud have skyrocketed in recent years.

Millennials may not be sending their life savings to a Nigerian prince, but that doesn’t mean they won’t be scammed.

Americans between the ages of 30 and 49 are the group most likely to become victims of investment fraud. According to a recent FBI report. Last year, the group reported more than 13,000 complaints to the FBI’s Internet Crime Complaint Center (IC3).

Breaking it down further, last year there were 6,654 complaints about investment fraud among people aged 30 to 39. In the 40-49 age group, which also includes the oldest Millennials and some members of Generation X, the number of investment fraud complaints was even higher, reaching 6,680 in 2023. The FBI notes that the data on age groups only includes those for which the victim filed a complaint. Their age range was also included.

Older adults have traditionally been considered the most vulnerable to online and other scams. FBI cybercrime agent Timothy Langan said in the report that tech support scams account for “more than half” of all losses.

However, when it comes to investment fraud, boomers, or those over 60, are theoretically the largest demographic group, ranking third, with 6,404 reports of investment fraud filed with the FBI last year. This may indicate that they are less susceptible to shady financial ventures than children.

Losses from investment fraud topped the list of all crime types tracked by IC3 in 2023, at $4.57 billion, an increase of 38% from last year. The number of complaints has also rapidly increased, from over 20,000 in 2021 to nearly 40,000 in 2023.

The report suggests that this increase is mainly due to the rise of cryptocurrencies, which are less regulated and easier to manipulate than other financial markets. According to the report, crypto-related fraud will cost investors $3.94 billion in 2023, accounting for more than three-quarters of losses from investment fraud last year.

The Federal Trade Commission warns that scammers often lure victims through online ads and social media posts, promising large profits with little risk.

After contacting potential victims, scammers may claim to have a “secret” or “proven” investment strategy and offer bogus training or products, according to the FTC. That’s what it means. Alternatively, they may lure victims to certain sites or apps to invest money, and then keep the money for themselves. They may even send you fake investment reports to encourage you to invest further.

Scammers often target social media accounts of celebrities, sometimes replying to posts with fake accounts that mimic the real ones. In 2021, a German man made headlines when he lost $560,000 worth of Bitcoin to a scammer posing as Elon Musk on Twitter. The man from Cologne (the BBC gave his pseudonym) explained that Mr Musk had donated his fortune in the false belief that it would double his fortune.

To avoid potential scams, investors should be wary of get-rich-quick schemes, or in the words of one scam victim, “avoid temptation.” He suggests that investors should always do their due diligence, even when it comes to venture companies and stock newsletters that seem legitimate.

The FBI is more direct, saying investors should not send money or disclose financial information to individuals they have never met in person.