Millennials and Gen Z aren’t worried about financial fraud, but they should be

Despite broadcasting their lives on social media, younger generations aren’t particularly worried about falling victim to financial scams, according to a new Bank of America study.

The Better Money Habits survey of 1,000 people found that only 15% of Gen Z and 20% of Millennials are worried about losing money through scams.

By comparison, 27% of Gen X and 27% of Baby Boomers think they’re exposed to financial fraud.

Younger generations “feel more connected in the flow of financials,” said Jennifer Ehresman, head of client protection at Bank of America. They have access to financial apps that let them track and manage transactions in real-time, she said.

While younger Americans are better equipped to identify fraud as it happens, this isn’t a substitute for better security.

For starters, cybersecurity experts say smartphones have made it easier for scammers to launch phishing attacks.

These pesky messages trick users into revealing sensitive information such as usernames, passwords, credit card numbers, and bank account information. The victim might not realize their information is stolen for several hours, days, or even longer.

In addition to phishing scams, Americans have also experienced a sharp uptick in personal data breaches and non-payment/non-delivery scams, especially during the holidays.

According to the FBI, Americans lost a whopping $10.3 billion through scams in 2022. But experts say the problem is much worse than what’s reported. As it turns out, the biggest attack vector is social media—where the vast majority of incidents go unreported.

Social media: The biggest threat

The U.S. Federal Trade Commission (FTC) calls social media “a golden goose for scammers.” The government agency reports that Americans have lost $2.7 billion through social media scams since 2021, “far higher than any other method of contact.”

As anyone who’s used Instagram knows, social media gives fraudsters a unique advantage in targeting victims.

“They can easily manufacture a fake persona, or hack into your profile, pretend to be you, and con your friends,” wrote FTC senior data researcher Emma Fletcher.

“They can learn to tailor their approach from what you share on social media. And scammers who place ads can even use tools available to advertisers to methodically target you based on personal details, such as your age, interests, or past purchases,” she said.

Younger generations—and Gen Z, in particular—are especially vulnerable to these attacks. According to Morning Consult, a digital intelligence platform, 76% of Gen Zers use Instagram, 68% are on TikTok, and 67% have a Snapchat account.

Per FTC data, 38% of the fraud experienced by people ages 20 to 29 was through social media. This figure is a staggering 47% for 18 and 19-year-olds.

Less wealth, less concern?

Researchers say younger Americans may be complacent about fraud because they have smaller bank balances than their parents, so they don’t think they’re a target. But that couldn’t be further from the truth.

A 2023 Gallup study found that low-income adults are most likely to fall victim to fraud. Households earning less than $50,000 a year are twice as likely as middle-income and upper-income adults to be scammed.

A pre-pandemic study by Experian also found that low-income families and those “struggling financially” are becoming top targets for fraud.

Meanwhile, a 2019 study by FINRA said people with lower financial literacy are prime targets for scammers. According to the Bank of America study, younger adults may be in this category because “they are still navigating financial literally and still understanding the pitfalls” of fraud.