In February, The Cut ran an eye-popping personal essay from one of its financial experts. Its title? The Day I Put $50,000 in a Shoe Box and Handed It to a Stranger. What followed was a 5,000+ word odyssey of unbelievably baffling proportions, one that proved even the shrewdest, most financially literate among us could fall prey to an online scam.
That writer’s experience launched a fleet of think pieces, most wondering how a woman, whose entire career was based on doling out money advice to others, could’ve believed the FTC and CIA were working together to investigate a financial fraud case with her at its center. But, as wild as her story seemed, many financial experts warned it could happen to anyone.
Online scams once targeted the older crowd – Boomers and Gen X adults who wouldn’t necessarily be described as tech-savvy. They were the ones who would fall for phishing emails, click on suspicious links, and hand out their Social Security number over the phone to a customer service rep claiming to operate on their bank’s behalf. But now, with more sophisticated technology and dozens of new online avenues to reach their marks, scammers are coming for the Millennial and Gen Z crowds. A recent Deloitte survey found that Gen Z Americans were three times more likely to fall for a scam online than their grandparents. And, in 2023, the FTC reported that consumers lost over $10 billion to financial scammers.
Digital natives like to think they’re immune to online grifts but the reality is, scammers are finding more sinister ways of duping them – robbing them of their money and their sense of security online. But it doesn’t have to be that way. UPROXX chatted with Steve Grobman, the Executive Vice President and Chief Technology Officer for McAfee, a global security software company, to find out which scams Millennials and Gen Z are most likely to encounter online – and tips for how to avoid them.
Tip #1: Don’t Panic
One of the driving emotions that caused The Cut’s writer to act so irrationally was fear, something online scammers are surprisingly good at stoking in their marks. There’s a bit of psychological manipulation at play when it comes to scams that invoke authority or threaten our sense of privacy online. “A lot of these scams are engineered to create a sense of urgency to make the victim respond very quickly before they start asking questions,” Grobman explains. Two of the most common types of scams he sees targeting Gen Z and Millennial customers are sextortion scams and fake fraud investigations.
Sextortion scams work by convincing the victim that their private computer or cellphone has been hacked. The scammer is essentially holding their information hostage, threatening to release compromising photos, videos, webcam surveillance footage, or private browsing histories unless they pay up. “It is something that can become very personal and very scary,” Grobman says, but it’s also “a complete bluff.”
The same is true for calls and texts that claim to come from the IRS, ones that hope to convince victims that their bank account or Social Security info has been stolen or that they owe a ridiculous amount in unpaid taxes. The more elaborate schemes scare their targets by suggesting their identity has been used to commit criminal charges across state lines, or that they’ve racked up thousands in debt that could see them facing legal repercussions. Whatever the scenario, Grobman says to put the phone down and take a breath before responding.
“Just stop and think if this makes sense,” he advises. “If a firm calls and says, ‘You owe all of this money,’ well, how does this firm know anything about my taxes if they’re not the government? That’s private information.” Another helpful tip: The IRS normally contacts people via mail, not by calling or texting them directly.
Tip #2: Never Send Money To Someone You Don’t Know
If you’ve seen the Tindler Swindler, you know how dangerous the world of online dating can be, especially when it comes to financial scams. According to McAfee, 68% of 18 to 28-year-olds are using dating websites to meet people which makes apps like Tinder and Bumble the perfect hunting ground for con artists hoping to make a quick buck. The problem with dating sites, according to Grobman, is that users go in with the expectation of interacting with strangers which means their defenses are already lowered. “It’s one of these situations where you don’t know somebody in the physical world, but you can establish a deep emotional relationship with them in the digital world,” he says. “Then the way the cyber criminals convert that into money for them is some event happens, there’s a medical emergency, and they need money. More and more are trying to get their victims to invest in fake cryptocurrency investment scams.”
Whatever the ask, Grobman says the answer should be “no.” Never send money or gifts to someone you haven’t met in person, even if they send you money first.
Tip #3: Don’t Call Them Back
Most online scams that target Millennials and Gen Z depend on immediate action from their victims. That means they want you to provide information quickly over the phone, or respond directly to their texts and direct messages. Along with taking a beat to question their motives, Grobman recommends opening up your own line of communication — whether it’s with your bank, your credit card company, your Amazon Prime account, or the IRS.
“Don’t call back the number that was left,” he says. “Don’t reply to the email. You can call your credit card company, or you can call your bank. Sometimes millennials forget they can pick up the phone and actually reach out to one of these institutions with a credible number that they find on the official website and say, ‘Hey, I got this correspondence. I want to validate that it’s authentic.’”
Tip #4: Use Credit Cards Not Crypto
Crypto is the Wild West of the money world at the moment, taking its share of bad press, but a lot of people still want in. Grobman gets that, but all of the things that make cryptocurrency appealing to younger generations — fewer regulations, more freedom, and anonymity — are also what make it a buffet for scammers looking to hustle the unsuspecting. “There are a lot of safeguards that traditional financial institutions put in place that just don’t exist when you get into cryptocurrency,” Grobman explains. “You have to be really careful if you’re going to use this type of medium because if somebody steals your crypto, it’s gone and there’s really no way to get it back.”
The easiest rule to follow is to only trade in crypto with trusted sources — people you know, and organizations you trust. And really, that applies to every form of payment transfer. “Make sure you’re using a form of payment that is cancelable like a credit card,” Grobman says. “Do not use gift cards, do not wire money. Be extremely careful with things like Zelle or Venmo. Some of those are a lot more difficult to get back if there is fraud.”
Tip #5: Beware Of Deepfakes
A.I. might be the technological wave of the future but there are some drawbacks to that too, especially when it comes to how artificial intelligence is used in financial scams. With programs now able to mimic voices, generate text-to-speech commands, and create emails and texts that appear shockingly human, Grobman says deepfakes are going to be the most dangerous tool in a scammer’s arsenal in the coming years. “Just as legitimate businesses are using A.I. to get better levels of efficiency, we see cybercriminals leaning into using A.I. and technology as well,” he explains. “When they contact individuals, they can use things like clone voice technology or A.I. generated voice, which can be used in a few different ways. It can either sound like a loved one in a targeted attack. It can also be used more generally where it simply sounds like the culture of somebody you’d expect from a position of authority. So if they call and they say, ‘I’m from the IRS’ and they’ve got a Midwestern accent and you live in the Midwest, that’s not as much of a tip-off as if they sound like they’re from a foreign country where it might be more obvious that it’s a scam.”
Besides investing in security software trained to spot these deepfakes, Grobman hopes the younger gen will make it more difficult for scammers to wield A.I. by guarding their personal information online. “One of the advances that A.I. arms the cyber criminal with is, that it can create a custom scam against an individual that can be better tailored if there’s information about that person. So by being able to cite your school and all sorts of little tidbits of information that make it more credible, very often there’s more information to work within those younger generations that haven’t really thought, ‘Should I tell the entire world everything about me?”
The common thread in guarding against any of these types of online scams — whether it’s travel-related, romance-driven, or disguised as a job-hunting scheme — is to be alert, aware, and just a bit suspicious when it comes to your digital habits.
“Even though we live in the digital age that moves very fast, sometimes slowing it down a little bit to gain confidence that things are as they seem can help prevent a lot of problems,” Grobamn says. “It’ll help prevent the spread of disinformation. It’ll help prevent you from getting taken for a scam.”
“I use the term digital street smarts. When all of us operate in the physical world, if we’re in a shady neighborhood, we lock our car doors. We don’t have big wads of cash hanging out of our pockets. It doesn’t mean that we don’t do fun things to live our lives, but we take common sense precautions to protect ourselves in the physical world. We need to do that in the digital world too.”