Top Reasons Millennials Are Susceptible to Financial Fraud
Millennials are very comfortable with electronics and social media platforms disclosing private information, and may not worry about the possibility of financial fraud. Yet, their comfort with technology and social platforms are the very thing that makes them more vulnerable than previous generations.
In 2014 a study conducted by the Federal Trade Commission revealed that those between the ages of 20 to 29 are the most affected when it comes to identity theft. This age group comprises of 20% of all complaints regarding identity theft. In 2015, another study conducted by Javelin concluded that college students were at higher risk of identity theft, yet less likely to recognize when they experience a stolen identity. The Javelin report revealed that 22% of college students experiencing identity theft did not realize it until being contacted by a debt collector. The problem is not as simple as increasing awareness and securing financial data more effectively.
FTC’s Consumer Sentinel Network Data Book determined that in 2013 Millennials lost 1.6 billion dollars from banks, lenders, and collection agencies. A victim of identity theft incurs a personal loss averaging $2,200.
Here are common activities that increase your risk:
Sharing Sensitive Information Online
Being accustomed to technology, Millennials do not adequately comprehend the dangers of sharing sensitive information online and give out information too freely. A Visa study completed in Canada found that 45% of young Canadians posted their credit card information through text, phone, social media, or email, without considering the consequences.
Even though you may not post detailed information or images on Facebook, Instagram, or Snapchat, you can still share too much information over unsecured networks. American Bankers Association says consumers are being asked to participate in card cracking schemes through social media. The scammer will ask the consumer to provide an account number and personal ID on Facebook or Twitter with the promise of payment. The scammer will then deposit a fake check into the account, and then withdrawal all existing funds. The individual did not realize they were giving a stranger access to their money. Unfortunately, in cases where you give someone personal account information, the bank will not replace the funds stolen from the account. Similar scams resulted in 11.6 million dollars in losses in 2014.
Less Debt but Easier for Hackers To Steal Your Money
Due to the tightening legislations, it is harder for Millenials to qualify for a credit card. As a result, Millennials tend to avoid credit cards when starting out. Approximately 1/3 of individuals under the age of thirty have never owned a credit card according to a recent Creditcards.com survey.
The subsequent reliance on debit cards reduces the accumulation of debt and requires you to live within a budget. However, the occurrence of identity theft can result in a higher level of financial loss when a hacker gains access to checking or savings accounts. For example, a stolen wallet resulting an unauthorized credit card charges, is not a direct loss to the consumer, because the bank or merchant covers the loss. However, money stolen from a checking or savings account requires a higher level of proof and a longer time for any replacement of funds. Closely checking bank statements, immediately reporting discrepancies, and protecting your financial data will help secure your money from thieves.
Using Public Wi-Fi to Bank Online
Young adults don’t think twice about checking account balances anywhere. Let’s say you are in a store and want to make a purchase. It would not be uncommon to jump online through the store’s Wi-Fi network to check the bank balance before making the purchase. The US Department of Homeland Security survey showed that 72% of Millennials had checked balances on unsecured networks putting them in danger of bank fraud. Public Wi-Fi is not secure, meaning everything you do while connected could potentially be seen by a third-party stranger using the hot spot.
Experts recommend that you do not enter or log into sensitive accounts when connected to a public network. IT experts also warn that connections to social media or email accounts can also result in an increased risk of hacker access due to common passwords. Be cautious on any website requiring you to key in passwords or other sensitive information. Connecting through a virtual private network (VPN), will encrypt the data transferred during your connection.
Making Purchases On Your Phone
The Ponemon Institute and ThreatMatrix discovered that 60 percent of Millennials make purchases on their phone in comparison to only 25 percent of baby boomers. Due to the rapidly changing technology, online shopping is not fully developed, leaving holes for hackers to gain access to private data.
Smart Phones also tend to have less protection with regard to firewalls and virus software, which give hackers access to your data. It is safer to log into a website and make a purchase from a desktop or laptop, rather than your phone. As capabilities for buying through smartphones and tablets increase, it is critical to ensure your device has adequate fraud protection software.
Millennials Openly Share Personal Information
Millennials share private information on social sites, along with sharing video or streaming accounts with friends. For example, instead of having individual Netflix accounts, you share them with your friends. Extremist conducted a study in 2015 that concluded ½ of individuals ages 18 to 29 share video streaming passwords, increasing the risk of identity theft. The sharing does not stop with videos and movies. A Visa Canadian study shows that Millennials are more likely to share their card numbers with friends and family putting them at a higher risk of fraud.
One of the challenges with easy access to online information is that a hacker may collect individual pieces of data from different sources. They may gain your birthdate from Facebook, your address from public records, and your account information from a tweet you sent to your sister, to make a purchase. Now they have everything they need to open an account in your name.
Millennials are a generation of individuals that typically trust each other. However, sharing too much personal information can lead to financial problems when strangers steal your data.