In a world of technology breakthroughs with new AI features and social media platforms, knowing how to protect yourself in an ever-changing digital world can be an insurmountable challenge. While you might think that fraud is obvious or that it's something that only happens to older generations, think again. Gen Z is just as susceptible to scams as any other generation, especially if you don't know the signs.
In this article, discover common ways you may come across fraud and how you can protect yourself from fraudulent schemes.
Fraud warning signs include suspicious links, unknown area codes, and urgent or threatening messages.
Romance scams use fake relationships to steal money or personal information.
Gen Z faces higher scam risk, being nearly twice as likely to be scammed as Baby Boomers.
AI deepfake scams are increasing, using realistic videos, calls, and texts to impersonate others.
As you go through your day, you might get several texts from your friends, family, and coworkers. But what about that notification you just got that you missed a payment at the DMV or you have a passed-due medical bill? These texts might make you pause... you can't think of anytime when you received a ticket, got pulled over, or missed a medical payment. Before responding to any message from an unknown number, it's vital that you consider the following before responding:
When you receive a text, a main tactic that a fraudster will try is to scare you into action. They may say things like:
"If you don't pay this bill in the next 2 hours, you'll receive a fine of $500."
"You're late on paying a ticket for speeding. If you don't pay by tomorrow, legal actions will be taken."
"Your payment did not go through on your last package. Please re-submit your payment, so it will go out by the desired delivery date, or it will be cancelled."
It's essential that you don't follow through on any of these requests. If you suspect fraud, remember to stop, slow down, and think before you act.
When someone texts you and expects a quick response that's a way to trick you into acting hastily instead of slowing down to think clearly. They'll pose threats to scare you into giving away personal information or paying money without thinking through consequences.
If there is a link that has random numbers or letters in the URL, it might be a phishing link to a fake website or a link scammed with malware. Never click on a link you don't recognize from someone you don't know!
If someone is calling you with an area code from a foreign country about your American driver's license, chances are they aren't from your local DMV. Receiving a call from an unknown area code or caller ID can be a first sign of a fraudster trying to reach you. If you do answer a call and suspect fraud, hang up and call the person who you are trying to reach directly.
The DMV, IRS, and other government agencies will not reach you through text, email, or social media to make initial contact. Their typical means of communication is through mailing letters. Texting or calling can come into play only if you subscribe to their agency.
Another way that fraudsters try to trick you is through social media. Here's some ways they could try to lure you in:
Similar to text message scams, DMs can also have phishing links. Don't click on any links from someone you don't know. If they have an urgent request or are from a government agency, chances are it's a scam.
A post might pop up in your feed that looks promising, but it might be a strategy to steal your money and personal information. For example, there might be an advertisement for a concert with your favorite band coming to your town, but it could be an impersonation scam trying to get you to buy fake tickets. Always be sure to contact a venue directly to verify the event and purchase tickets.
Unfortunately, a common scam on social media is dating scams. A fraudster can gain trust from an individual over months or even years through texting or calls, making them think they are a couple. As they've built the relationship, they've been able to access personal information and eventually will ask for money once they know they have your trust.
Ways they'll ask could be a claim that they can't pay for airfare to visit you, or they are stranded somewhere and need money for gas. By asking for your banking information, they are now accessing your finances. You might start noticing unexpected charges on your account over time, and they will eventually ghost you.
Another thing to look out for with social media scams are fake job opportunities. For example, you might get a DM from a company you've never heard of saying you could make hundreds of dollars a week for only a few hours of work. Others might ask if you want to partner with an "influencer" to represent a brand or product. Regardless of their strategy, the key thing to remember is: if it's too good to be true, it probably is.
While the Gen Z generation might be more tech savvy than older generations, they are actually at a significant risk for fraud from AI. According to a survey from Deloitte, Gen Zs are twice more likely to have their identity stolen, a device hacked, fall for an online scam, or social media hacked than Boomers. So, if Gen Zs are more tech savvy, yet are falling for more scams, what are some ways that fraudsters are successfully getting them to fall for their schemes?
Along with the text scams, romance scams, and job scams, AI deepfakes are now on the rise. AI deepfakes are when scammers use AI to create fake voices, videos, or images to impersonate a real person or create a false story. An example would be a phone call from you get who you think is your boss—the caller ID says it's your boss and when you answer, it even sounds like them. However, they start making odd requests, like asking for a company password or credit card information. Their tone also seems off...there requests sound urgent, but there voice seems almost too still. Turns out, this all was a scam where their voice was created by AI.
Deepfakes like this example can happen at any time through photos, videos, and emails. It's critical that you know what signs to look out for. Even people familiar with AI can fall for these types of scams. If you suspect that your being lured by an AI deepfake, ask the AI specific questions. The AI's facade will start to crack when given random prompts it wasn't programmed to answer.
Q: What are common scams that Gen Z should look out for?
A: Romance scams, impersonation scams, phishing scams, and AI deepfake scams are all threats Gen Z should be aware of on social media and online.
Q: What are early signs of a scam?
A: Signs of a scam are an unknown number, foreign area code, suspicious link with random letters or numbers in the URL, and the message is threatening or creates a sense of urgency.
Q: What is a romance scam?
A: Romance scams are when fraudsters poise as a romantic partner to lure you in to trust them, so you will give personal and financial information.
Q: How do I know if tickets are real or a scam?
A: When buying tickets to a concert or show, go directly to the venue or artist's website or call to purchase your tickets. Avoid third-party sellers to ensure your tickets are legitimate and not a scam.
As you journey into the beginning of your financial journey, it's essential to learn about common scams and keep your money in a place it will be safe. At Leaders, we strive to educate our members on how to protect their money from fraud schemes and ensure their financial security.
Do you think you can recognize fraud? Take our quiz to find out!
Wanting to learn more about how to manage your finances well as a young adult? Check out our free Gen Z Guide to Grown-Up Money Decisions.
Want other money tips for young adults? Read our blog, "Financial Literacy in Your 20s: 5 Things School Never Taught You."
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