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TLast week, the internet reacted in horror to the story of how a financial advice columnist responded to a financial industry columnist. the cut lost $50,000 to a scam, but for many young people, this story may be uncomfortably familiar.
Deloitte’s 2023 report found that young, digitally savvy adults may be more adept at using the internet, but Gen Z, those born between 1995 and 2012, are less likely than baby boomers to They are more than three times more likely to be scammed online.
Experts say that’s partly because scams are often targeted at younger generations, more than half of whom spend an average of at least four hours on social media each day. “The older generation is now [fall for] “It’s a standard phishing technique where you email or call and say your child or grandchild is in trouble,” says Jonathan H. Swanberg, president of TSA Wealth Management. “The younger generation may just see ads on Facebook, Instagram and TikTok for investments that pay him 10% a month without any risk.”
Financial planners say these get-rich-quick schemes are an opportunity to prey on a generation that inherited inflation, rising housing costs and rising debt. At the same time, young adults are generally more trusting of what they see online. A 2022 report from Pew Research Center found that adults under 30 are likely to trust information they see on social media about as much as information they get from national media.
“They’re not scrutinizing property managers the way they scrutinize property managers, and they’re not scrutinizing property managers with an appropriate amount of research,” said Katherine Varega, a certified financial planner based in Winchester, Massachusetts. “We can’t let them solve the problem.” Too much information is available from people who are not actually qualified. With the advent of social media, the situation has probably become ten times worse for the younger generation. ”
Falling for a scam can be costly. Consumers lost more than $10 billion to fraud in 2023, a record amount, according to data from the U.S. Federal Trade Commission (FTC). This figure represents a 14% increase in reported losses compared to the previous year.
Experts have warned that as fraud becomes more complex, the number of scams and people being scammed could rise. Certified financial planner Andrew Fincher points out that scammers often try to disguise the messages as genuine emails, texts, or phone calls from banks. This can be especially harmful to young people who are used to living their lives online. Advances in AI may also pose risks to consumers, as the technology makes fraud increasingly sophisticated and realistic. “If you don’t pay attention to that, it’s easy to let things go,” he says. “Young people typically spend more money online, so they use mobile banking, save passwords on their phones, and use similar passwords.” This led to security breaches. It becomes very easy for fraudsters to gain access to multiple accounts.
“The older generation has no problem with that because they have never been addicted to drugs. [being] “They also had a complete distrust of everything online and digital,” Varega added.
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