How to protect kids from scams

Despite the stereotype of seniors being most vulnerable to fraud, teens and young adults are actually more likely to lose money in a financial scam.

I’ll admit it. When I consider the type of person who falls prey to a con, my mind conjures up an image of a kind, little old lady, who is probably neither tech savvy nor very well educated. But, according to research by the Better Business Bureau Institute for Marketplace Trust (BBB Institute), I couldn’t be more wrong.

Among the more than 30,000 consumers who have reported details of illegal schemes to the online BBB Scam Tracker since the site was launched in late 2015, 89 per cent of seniors (age 65 or older) recognized the scam in time, with only 11 per cent actually losing any money. For those aged 18 to 24, however, more than three times as many failed to recognize the scam before it was too late: 34 per cent reported losing money in the con.

Why are young people so susceptible to fraud? Rubens Pessanha, director of marketing research and insights at the Council of Better Business Bureaus, blames “optimism bias,” which is the belief that other people are more vulnerable than we are.

In a paper called Cracking the Invulnerability Illusion: Stereotypes, Optimism Bias, and the Way Forward for Marketplace Scam Education, co-author Pessanha explains that because seniors have been drilled with the message that elderly people are vulnerable to fraud, they don’t suffer from the same optimism bias that young people do. “They’ve heard, loud and clear, that they are at risk. Seniors may very well be more scam savvy than others,” he writes. “They are also less impulsive buyers than younger consumers, and less likely to be making purchases online where so many scams take place.”

So, the best way to protect kids and young adults from fraud is to make sure they understand they are at high risk of being duped. Indeed, when asked what might have prevented them from being scammed, victims said knowing about different scam types and understanding common methods used by scammers prior to being targeted would have helped.

It’s a message my 10-year-old son, Adam, hears from his Dad and me over and over again: you can’t trust anyone on the Internet. He knows, for example, that online purchases from a large retailer are a safer bet than those from individuals on sites such as eBay. He also knows not to share any personal information online. So, while he does participate in a few online forums for video game programming hobbyists, he uses a handle instead of his real name.

We all make mistakes, though. He sent a screen capture of a game to one of the other forum members in a private message, not realizing that the image on the screen included his user name on our PC: Adam. Thankfully, it wasn’t public; and the other user was kind enough to point out the error and delete the message.

But, here’s the thing. I’ll bet Adam will never again send a screen capture (or anything else) without first being absolutely sure there is no personal information displayed. In my opinion, this is another way to protect kids from becoming future fraud victims. If they can make mistakes like these — and learn from them — when the stakes are low, they are far more likely to be mindful of the risks when they’re older.

Keep the conversation going

Have you or anyone you know been a victim of a scam? Did you report it? Post a comment below.


The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Tamar Satov

Managing Editor, CPA magazine
Tamar is a journalist specializing in business, parenting and personal finance. She blogs regularly in this space with advice and anecdotes on her efforts to raise a money-smart kid.