Millennials are tech-savvy. Having grown up with the internet, they know how to use technology to connect with loved ones, invest their money, and even start businesses from their computers or smartphones.
You’d think that would make them wise to online scams and fraudsters. However, a new report from the Federal Trade Commission (FTC) on identity theft and financial crimes found that millennials lost money because of fraud more often than older generations did.
According to the report, 40% of people between the ages of 20 and 29 who reported fraud also reported losing money, compared to just 18% of people over the age of 70.
Here’s what you need to know about the FTC’s report and how to prevent becoming a victim of fraud.
The prevalence of online scams
In 2017, there were over 1.1 million instances of fraud reported to the FTC, and 130,000 were online scams using websites or email. Millennials, who tend to use the internet on a daily basis, were at greater risk. They were most likely to become the victims of credit card theft and employment or tax-related fraud.
However, the median loss was higher for older generations. When people between the ages of 20 and 29 had a loss, it averaged $400, compared to an average of $621 for people between the ages of 70 and 79 who had a loss.
Even though millennials lose less money than older generations, the impact of credit card theft or identity theft can be long-lasting and devastating. As young people struggle to pay down their student loan debt or save to buy a home, being a victim of fraud can derail their plans.
6 ways to protect yourself against fraud
Online scams are becoming increasingly sophisticated, making it difficult for even the most tech-savvy people to differentiate between fraud and the real deal.
1. Don’t click on links in emails
In phishing scams, criminals pose as your bank or credit card company and send out realistic-looking emails. It’s one of the most effective ways thieves can get your information. In the emails, which often look identical to the emails legitimate companies send, the criminal might say your account has been compromised and that you need to click on a link to verify your information.
Once you click on the link, it will direct you to what you think is the company’s website. It will prompt you to enter your personal information, such as your account password or even your Social Security number. Once you submit that information, thieves can use it to access your credit cards or bank accounts or open new accounts in your name.
If you receive an email from your bank or credit card company, don’t click on any links or respond to the email. Instead, open the company website using a separate browser or dial the number on the back of your debit or credit card. Once you reach the company, it can tell you if the information is real or if any action is needed on your part.
2. Be cautious on social media
Social media can be dangerous. Many people have friends or followers they don’t know in real life. Or a trusted friend’s account could be hacked. Be wary of clicking on any special offers or links a friend posts unless you speak with that person directly.
3. Use unique passwords
Using your pet’s name for a password might sound like a great idea, but it can open you up to identity theft. Instead, use a password generator, such as LastPass, to create a new password for each site you use. The passwords will be unique and impossible for anyone to guess.
4. Don’t shop with public Wi-Fi
When you’re surfing the net in a coffee shop, hold off on making online purchases. Public internet isn’t secured, so other people can find ways to see the information you enter, including your credit card numbers. Instead, wait until you get home or have a secured connection.
5. Check your credit report
It’s a good idea to check your credit report regularly to look for any fraudulent accounts that were opened without your permission. You can get a free credit report from each of the three credit reporting agencies — Equifax, Experian, and TransUnion — once a year at AnnualCreditReport.com.
6. Place a fraud alert on your account
If you think your personal information has been compromised, it’s important that you take action right away. Contact each of the three credit reporting agencies to set up a fraud alert. When you do so, it’s more difficult for thieves to open new lines of credit in your name because creditors are required to request additional forms of identity verification before issuing the applicant a credit card or loan.
Handling financial scams
As the FTC’s report highlighted, millennials are at greater risk of falling victim to identity theft and online scams. If it happens to you, report the incident to the FTC so it can take action.
For more information on protecting your identity, consider signing up for Credit Karma’s free identity protection service.
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