Millennials grew up online. From making their first screen names with America Online in the '90s and poking around chatrooms, to using HTML to customize their Myspace pages in high school, and now curating their Instagram feeds, navigating the internet is second nature to these digital natives.
But this ever-online generation may be uniquely positioned as targets of internet scams.
Millennials are 25% more likely to report losing money to fraud than those over 40, according to an October 2019 report by the Federal Trade Commission. The report also found this age group:
Was twice as likely to report falling victim to shopping fraud.
Reported getting bested by business and debt relief scams in greater numbers.
Was 77% more likely than older consumers to report losing money to a scam that started over email.
While millennials are more likely to report this kind of fraud, the tools to prevent and recover from such scams apply to consumers of any age.
Be skeptical about social media shopping
It's become a meme of its own: "What it looks like online versus what you get when it arrives." That dress or pair of sneakers may look good online, but when it arrives, you find that the dress looks like a dishrag and the sneakers are held together with hot glue.
Millennials are twice as likely to report losing money to items that are different from what they expected or that never show up, compared to those over 40. This all-too-common occurrence might seem like the cost of doing business online, but it's actually a form of online shopping fraud.
Misleading ads in social media feeds and for online-only stores may be to blame for more frequent reports of shopping fraud, says Charity Lacey, vice president of communications at Identity Theft Resource Center, a nonprofit organization that helps consumers recover from identity theft.
Lacey warns consumers to exercise caution before purchasing items from any unfamiliar company they encounter online, especially if it seems like they're selling only one or a handful of products, since that can be a warning sign of a scam company. "I would liken this to the guy with the trench coat selling watches and gold chains," says Lacey.
What you can do: Vet any company before you buy from it online. Proceed with caution if the company doesn't have an address listed online, has no clear return policy and sells only the one item you saw advertised.
Use a credit card when shopping online, advises Lisa Schifferle, staff attorney at the FTC. That way, if you encounter fraud, you can take advantage of protections under the Fair Credit Billing Act, which can help you get reimbursed.
Report the fraud to your credit card company and file a complaint with the FTC as soon as you think there's a problem, Schifferle says. Gather information about the transaction, including purchase amount, vendor name and transaction date, before contacting your card issuer. This information should be on your billing statement. You may also want to request a new credit card number to protect yourself.
Beware of work scams
The saying "you have to spend money to make money" shouldn't apply to a job offer, but that's exactly the trick of some employment scammers.
The fake company offers a business opportunity of some sort, such as a work-at-home job, but says you'll have to pay a fee upfront for training or other work-related materials. Then the job never materializes, and your money is gone.
What you can do: Be wary of any organization that asks you to pay for training or a job opportunity that seems too good to be true. Report scams to the FTC.
Doubt debt relief offers
Millennials are notoriously debt-saddled, so it might not be surprising that this generation also reports more instances of falling victim to debt relief scams. In fact, millennials were 86% more likely to report losing money to debt relief scams compared to those over 40.
Some scams work by having you pay an upfront fee for their services -- and then never deliver on their promise. Know that it's illegal for a company to charge upfront fees in this way.
Be wary of companies that offer debt help that seems too good to be true. "If (the company) promises to get rid of all your debt, or if they tell you don't talk to your creditors, those are red flags," says Schifferle.
What you can do: Report any incidents of debt relief fraud to your state's attorney general.
Talk with a nonprofit credit counseling agency for debt help. These organizations offer free financial advice and can help you find legitimate ways to make your debt more manageable.