The internet reacted in horror last week at the story of how a financial-advice columnist at The Cut lost $50,000 in a scam, but for many young adults, the tale may be uncomfortably familiar.
While younger, digital savvy folks may be adept at using the internet, Generation Z—born between 1995 and 2012—is more than three times as likely to fall for online scams compared to baby boomers, per a 2023 Deloitte report.
Experts say part of the reason for that is scams are often tailored to the younger generation—more than half of which spends an average of at least four hours on social media daily. “Older generations are going to [fall for] standard phishing schemes through email, or where they get you on the phone, and tell you that your children and grandchildren are in trouble,” says Jonathan H. Swanburg, president of TSA Wealth Management. “The younger generation may just see an ad on Facebook, or Instagram, or TikTok for some investment that's going to pay you 10% a month with no risk.”
Read More: 9 Cash App Scams You Should Know Of
Financial planners point to these get-rich-quick schemes as opportunities to prey on the generation that has inherited inflation, high housing costs, and increased debt. At the same time, younger adults are generally more trusting of what they see online. A Pew Research Center report from 2022 found that adults under age 30 are almost as likely to trust the information they see on social media as information they learn from national media outlets.
“They are not vetting the way you would vet a property manager, or would allow the property manager to do the right amount of research to fix something for you,” says Catherine Valega, a certified financial planner based in Winchester, Mass. “You have too much information coming from people who aren't really credentialed. With the onset of social media, it probably made things 10 times worse for the younger generation.”
Falling for a scam can prove pricey. In 2023, consumers lost an all-time high of more than $10 billion to fraud, according to data from the Federal Trade Commission (FTC). That number is a 14% increase of reported losses compared to the year prior.
Experts warn that the number of people that fall for frauds or scams may only increase as scams become more complex. Andrew Fincher, a certified financial planner, notes that scammers often attempt to disguise their messages as real emails, texts, or phone calls from a bank—which could be particularly pernicious for the younger adults more comfortable living their lives online. Advancements in AI can also pose risks to consumers as technology makes the scams increasingly elaborate and realistic. “If you're not paying attention to it, it's a lot easier to let things go by the wayside,” he says. "Younger adults, typically are going to have a lot more of their finances online—so they do mobile banking, saving passwords in your phone, using similar passwords." That can make it a lot easier for scammers to access multiple accounts if there's a security breach.
"The older generation doesn't have a problem with that because they were never addicted to [being] online and things were never that easy," adds Valega. "They've also had complete distrust of everything online and digital."
FAQs
"Younger adults, typically are going to have a lot more of their finances online—so they do mobile banking, saving passwords in your phone, using similar passwords." That can make it a lot easier for scammers to access multiple accounts if there's a security breach.
Why is Gen Z surprisingly susceptible to financial scams? ›
Gen Z, typically considered those born 1997-2012, have always known a world of smartphones and social media. Unfortunately, that means Gen Z is particularly vulnerable to online scams. Cybercriminals often exploit their trust in technology and lack of experience in financial matters.
Is Gen Z struggling financially? ›
Young members of Gen Z are struggling more financially today than Millennials did at their age 10 years ago, according to a new study published last week by the credit reporting agency TransUnion.
Who is most susceptible to scams? ›
Although Gen Z was identified as the most frequent age group to be scammed or hacked, older generations tend to be out more money when they do become victims.
Why are scams increasing? ›
Digital scams, including investment fraud and people-trafficking deceptions, are on the rise, according to INTERPOL. The increase, the agency says, is due in part to the global embrace of new technologies. In 2023, scammers stole over $1 trillion from victims around the world.
Why is Gen Z so vulnerable? ›
This is heavily influenced by the increasing use of technology and the effects of social media, like FOMO, pressures of social comparison, and the immediacy of results. School, politics, school shootings, and financial worries are also deciding factors of mental health issues among this age group.
Is Gen Z the poorest generation? ›
Unsurprisingly, Gen Z has the lowest average net worth of any generation. As they are just getting started on their careers and haven't had much time to accumulate wealth, this makes perfect sense. According to the Federal Reserve, individuals under the age of 35 have a median net worth of around $39,000.
Does Gen Z have a serious debt problem? ›
A recent report by the Federal Reserve found that 15.3% of Gen Z are maxing out their credit cards and falling into debt, compared to 12.1% of Millennials, 9.6% of Gen X, and 4.8% of Baby Boomers.
Are Gen Z motivated by money? ›
Through a compilation of Gen Z interviews and studies from Bain & Co, CFA Institute, EY, and others, the article concludes that the youngest generation in the workforce is motivated by competitive compensation and quick career growth, and is quick to move on to other opportunities if they don't get that.
Are Gen Z willing to spend money? ›
Gen Z is more willing than any other generation to pay 50% or 100% more for sustainable products (CGS) While 35% of all consumers said they'd be willing to spend 25% more than the original price for a product that is sustainable, Gen Z were the most willing to spend big money to ensure they were being eco-friendly.
The experts say financial desperation and a lack of awareness about evolving scam techniques contribute to why many individuals today are being taken in by scams.
What age group is getting scammed the most? ›
According to the Federal Trade Commission (FTC), adults ages 18 to 59 are more likely to report losing money to scams, with online-shopping fraud, cryptocurrency investment scams and job scams being the most common.
What is the susceptibility to scams scale? ›
The susceptibility to scams scale is a five-item self-report measure in which participants rated their agreement to a statement according to a 7-point Likert scale (strongly agree to strongly disagree). The five statements included in the measure have been previously published [specific items published in James et al.
Are Gen Z more susceptible to scams? ›
While younger, digital savvy folks may be adept at using the internet, Generation Z—born between 1995 and 2012—is more than three times as likely to fall for online scams compared to baby boomers, per a 2023 Deloitte report.
Are financial scams getting worse? ›
More people are losing money to scams than ever before, according to the Federal Trade Commission, which found that reported consumer losses to scams increased by 30% from 2021 to 2022.
Why are so many scams likely? ›
Are you noticing a surge in scam calls lately? Unfortunately, there are many reasons why you may be getting targeted by scammers. They may have purchased your number from a third-party data company, who likely got it when you used it to buy or sign up for something online. They may have also found it on the Internet.
What is Gen Z most insecure about? ›
Appearance is the top-rated anxiety for Generation Z.
45% of those surveyed said they feel anxious about their appearance – more anxious than they feel about their career prospects, money or terrorism.
What are the reasons that so many Gen Zers have side hustles? ›
Beyond paying bills, the top reasons Gen Zers and millennials have side hustles are to:
- Have money for discretionary spending or saving (34%)
- Fill their spare time (26%)
- Pursue their passions (21%)
- Diversify their income (20%)
Gen Z'ers consumer characteristics tend to reflect their pragmatic approach to money and education. Other key influences are their affinity for technology, their belief in social causes, and a strong individualistic streak.
Why does Gen Z want authenticity? ›
Gaining trust
This kind of authenticity creates a sense of trust and reliability, which is something that Gen Z values in our relationships, both personal and professional. We want to know that the people and brands we interact with are honest and have our best interests at heart.
