Millennials are more susceptible to being scammed than other vulnerable groups. That’s the message from the Better Business Bureau after a study by the consumer advocacy organization showed that young people fall for scams most often of all groups.
“We’ve bought into stereotypes about scam victims – they’re usually seen as vulnerable and elderly, or gullible and poorly educated,” said the study’s co-author Emma Fletcher in a bureau news release. “These stereotypes are strongly held… and they are wrong. We are all at risk, but younger and more educated individuals are actually the most likely to be scammed.”
The study was based on 2,000 surveys taken by people in Canada and the U.S.
Evan Kelly, senior communications advisor with the Better Business Bureau, said the study results came as a shock to him.
Millennials – so called because they came of age after the new millennium – are most susceptible because of what the study calls an optimism bias.
“Basically, it is, ‘I am young, smart, I am tech savvy. I am all over the computer and the Internet. I know how all this stuff works and all about social media. These scams couldn’t possibly happen to me,’” Kelly explained.
At this time of year, youth can be the targets of online rental and roommate scams.
“Students are desperately looking for a place to live and they respond to an ad,” he explained. The landlord responds that they are out of the country and can’t be there to meet the student, so asks for a couple of months rent, promising to send keys that never come.
“Or sometimes they will say, ‘If you can pay six months in advance we will give you a break on a couple of months, and we will send you the keys,’ and low and behold the place doesn’t exist.”
Kelly advises renters to always go to the suite and meet the potential landlord.
“If it is an apartment, knock on a couple of doors to make sure that they understand what is going on, who that person is, whether or not it is an actual rental unit.”
Youth can also fall prey to scams of online offers to work from home or jobs as mystery shoppers, Kelly said.
“Working and going to school is difficult for anybody, we have all been through it,” Kelly said, explaining why youth may be quick to jump on offers that are too good to be true.
The key to distinguishing a real job from a scam is typically there’s no interview process or application process with the scam, Kelly said.
“What they are going to do is send you a cheque for usually around $4,000. The cheques look really legit, they are on the right paper… with a bank and branch numbers across the bottom.”
The victim will be asked to deposit the cheque and then withdraw money for office supplies or something to do with their “job” and forward money back to the company as part of their administration costs.
“Of course the cheque bounces and the victim is still liable to the bank.”
Scams aren’t only something for youth to be on the alert for.
The Canada Revenue Agency scam was the most prevalent scam of the last year, according to Kelly.
It comes in a couple of forms.
“The most notorious is these harassing phone calls. People get these calls at all times of day… that say ‘You owe Canada Revenue Agency some more taxes. You better pay this now or you are going to get arrested,’ or they sometimes contact people with foreign last names and say ‘You are going to get deported if you don’t pay this right now.’” The scam also comes in the form of emails.
“They look very official, they have all the right logos and the lingo and ask for the taxpayer’s social insurance number,” he said.
Bottom line is the real government revenue agency would never solicit a social insurance number or solicit personal information, Kelly said. Canadians lost at least $3 million to the tax scam, according to Kelly.
Though not new, the gifting circle scam has resurfaced of late, according to Kelly.
“It is a typical pyramid scheme that is targeting women,” Kelly said, adding it is usually fairly affluent women who are victimized. The women are asked to put in about $5,000 into a “gifting circle,” or “women’s financial collective.”
“They come up with all these endearing terms that sort of rope women in,” he said. Usually women are asked to join by people they know, Kelly said. “It is a recruitment thing. You are supposed to invite eight women and get them to invest $5,000.”
The women are told if they keep recruiting their big payout will come at a later date.
“Sometimes it is done under the pretence of helping another family in need… so it has this philanthropist feeling about it,” he said.
The difference between a scam and multilevel marketing is that with legitimate marketing schemes there is some product associated. “It does rely on recruitment to build your business, but they have something that they are selling,” Kelly said..
The key red flag of the scam is that success or failure of the payout relies on subsequent recruitment.
“After a couple of rounds it simply falls apart and everybody loses their money,” Kelly cautioned.
The people at the top of the schemes know exactly what they are doing, he added, and they disappear.
Sgt. Jolaine Percival, of the Squamish RCMP, said officers haven’t seen a recent spike in Squamish residents being victimized by scams, but they do get calls from locals checking on offers they believe might be fraudulent. For more information on current scams making the rounds go to www.bbb.org/mbc. The Squamish RCMP advises scam victims to contact the Canadian Antifraud Centre at www.antifraudcentre.ca or call 1-888-495-8501.
