The advancement of the digital world has brought along with it innumerable new opportunities for us, but lurking beneath the rose-tinted surface, online scams are constantly evolving, and it is becoming harder and harder to discern legitimate business from internet fraud. United States consumer losses to fraud–estimated to be $10.3 billion in 2022–are rising at an alarming rate. Young people are particularly vulnerable, and a recent study found that Gen Z’ers are more likely to fall for online scams than any other generation: The amount of money lost to online scams by Americans under the age of 20 was found to have risen by 2500% between 2017 and 2020.
The most damaging form of digital fraud, cryptocurrency scams took an estimated toll of $3.8 billion in 2021 alone. Contrary to the traditional methods of scamming aimed at older generations, crypto scams have been particularly successful in enticing young people through the promise of get-rich-quick schemes.
A telltale sign of crypto scams is that they promise the unachievable. Scammers often entice prospective crypto investors by guaranteeing massive and immediate returns, something no investment manager–legitimate or otherwise–can do. This type of scammer can commonly be found on social media, hawking their crypto successes in comments or dm’s. It’s safe to say that any stranger contacting you about crypto is a scammer.
As millions of teens across America work on their college applications this fall, many will fall for another type of fraud aimed almost entirely at vulnerable young people: scholarship scams. These scams take advantage of rising tuition costs, luring in students with fake scholarship applications designed to steal personal information or by demanding application or processing fees in order to enter you into fake scholarships. According to the FTC, “If a company promises you a scholarship or grant in exchange for a ‘processing cost,’ ‘redemption fee,’ or other upfront payment, walk away.” Each year, more than 200,000 cases of scholarship fraud are reported in the US, with a total cost of more than $22 million. This can be devastating because the scams target those who are already in need of scholarship money, and piling losses to fraud on top of the already exorbitant costs of college can have a serious impact on the future of the victim.
Perhaps the oldest digital scam, and among the most damaging, with a reported toll of $660 million in 2022 alone, phishing is another common type of digital fraud that everyone should be aware of. In phishing attacks, victims receive a call or email from someone claiming to be from a company, most commonly PayPal, Facebook, Microsoft or Netflix. In the scam, fraudsters attempt to “fish out” (hence the name phishing) personal details that can be used to access everything from email accounts and social media pages, to bank accounts or investments. The average victim of a phishing scam loses nearly $900, and because financial information is often targeted, there is a potential for massive losses.
Phishing attacks can be avoided through careful verification of calls and emails; and legitimate companies will likely not request your financial information through email. by setting up multi-factor verification, you can protect yourself even if your information is compromised. Another way to protect yourself from phishing is to install readily available security software so that phishing attacks are blocked before you even receive them.
The digital world can be a dangerous place, and without proper knowledge, it can be difficult to traverse the gauntlet on online scams, but with a bit of research and preparation, the risks can be made fairly negligible. As digital fraud continues to advance, it’s important to stay informed so that you take the actions necessary to protect yourself from these scams that have taken advantage of so many people.
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