Gen Z, millennials are less worried about fraud than older generations. But they have a unique risk

Younger adults are less worried about financial fraud than are older generations, a recent study found.

Only 15% of Gen Z and 20% of millennials are concerned about falling victim to stolen money or assets through deceptive tactics, according to a Bank of America Better Money Habits survey of 1,000 respondents. By comparison, about 27% of Gen X and 27% of baby boomers feel at risk of fraud.

“Younger generations are still navigating financial literacy and [are] still understanding the pitfalls” of fraud, said Jennifer Ehresman, head of client protection for consumer and small business at Bank of America.

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Younger cohorts also tend to believe they are less exposed to fraud thanks to the immediacy of online banking apps; the accessibility allows them to check account transactions in real time, Ehresman said.

“They feel more connected in the flow of financials,” she added.

However, believing they can spot and report fraud quickly may offer a false sense of security.

It’s true that older adults tend to have bigger account balances on the line. But that doesn’t mean younger generations can’t experience severe consequences, said Matt Schulz, chief credit analyst at LendingTree.

“Their credit may not be as strong … they don’t have that much wiggle room in their budget. Financial fraud is a really big deal and can be really impactful,” Schulz said.

Fraudsters are using younger adults’ online presence to their advantage. Consumers lost about $2.7 billion to scams on social media, far higher than any other method of contact, the Federal Trade Commission reported in October.

Those losses are more common for younger generations. During the first six months of 2023, social media was the criminals’ point of contact in 38% of fraud losses for people ages 20 to 29. For those 18 or 19 years of age, the figure was 47%, according to the FTC.

The amount of time it takes to recover from a scam will depend on the information compromised.

“In some cases, it’s fixed in an afternoon; other cases, there can be more involved,” Schulz said.

For example, if a scammer obtained your credit card number and racked up charges, fixing the problem may take just a phone call where you report the issue, as credit cards have rigorous fraud protections.

However, if someone stole your Social Security number, that can have bigger ramifications that are harder to recover from.

A criminal could use that information to open new credit cards or take out new loans in your name.

They could also use your personal information to file a tax return in your name and claim your refund. The IRS’ Identity Theft Victim Assistance program had 294,138 individual case receipts during fiscal year 2023, a hike from 92,631 cases in 2019, according to a recent report from National Taxpayer Advocate.

“One of the best things to do is building [a] basic financial fraud check,” Schulz said.

That means routinely checking your bills and credit card statements. A fraudster who gets your credit card information will test if you notice small charges.

“It’s a matter of a bad guy [who] gets ahold of your credit card and they buy a candy bar at a gas station,” Schulz said.

If you don’t recognize a charge, take action and report it.

“The first time you look through the list of transactions will take a while. But … it builds that positive habit,” he said.

Be skeptical any time you’re thinking of signing up for a service, especially if it requires your financial information. Before you fill in any forms with sensitive data, understand the fine print and what the impact could be if that information were stolen.

“If something feels too good to be true, it’s okay to say no,” said Schulz.

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