FTC Report: Millennials More Likely to Lose Money to Scammers than Older Adults
NASHVILLE – The Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division is sharing the results of an annual report from the Federal Trade Commission (FTC) that reveal a fraud loss trend that may be surprising to some: Millennials reported losing money to financial scams more than older consumers.
According to the FTC’s 2017 Consumer Sentinel Network Data Book, consumers in their twenties reported losing money to fraud more often than those over age 70. For example, among people aged 20-29 who reported fraud, 40 percent indicated they lost money. In comparison, just 18 percent of those 70 and older who reported fraud indicated they lost any money.
However, the report also indicated that when these older adults did report losing money to a scammer, the median amount lost was greater. The median reported loss for people age 80 and older was $1,092 compared to $400 for those aged 20-29. Tennessee ranked 10th in the U.S. in 2017 for reports of fraud with total reported consumer losses at $13.7 million.
“No matter your age, steps can and should be taken to safeguard your hard-earned money from con artists,” said TDCI Assistant Commissioner for Securities Frank Borger-Gilligan. “Perform thorough research and take your time before committing your funds to an investment. Becoming an informed and skeptical investor is the best tool to prevent financial fraud.”
The FTC’s 2017 data book included complaints by 2.68 million consumers regarding fraud, identity theft and other types of consumer concerns. This is a decrease from last year’s nearly 3 million consumer-related complaints.
The TDCI Securities Division offers the following securities fraud prevention tips to help Tennesseans of all ages protect their investments:
- Investment scammers can target investors by using social media to establish trust and credibility more quickly than face-to-face networking. The scam can spread rapidly through a social network as the con artist gains access to the friends and colleagues of the initial target.
- Search the names of all persons and companies connected to the investment being offered. The Internet offers anonymity and scam artists take advantage of this.
- Know how much risk you are willing to take with your investment; understand how much risk you should be taking given your age, family circumstances and other factors.
- Take your time; don’t allow anyone to rush your decision-making process.
- Never accept a verbal contract and never sign anything before reading it carefully and understanding it. If the language in a contract confuses you or feels wrong, walk away.
- Many online investment scams promise unreasonably high short-term profits. Guarantees of returns around 2 percent a day, 14 percent a week or 40 percent a month are too good to be true. Remember that risk and reward go hand-in-hand.
- Check the licensing/registration of the seller and product offered by contacting the Tennessee Securities Division.
- Check to see if any enforcement action has been taken against the person offering the investment opportunity.
- Don't feel pressured to" act now." Take time to check out the investment yourself, and remember the old adage: "If it sounds too good to be true, it probably is."
Remember: Before making any decisions with your money, ask questions, make sure you understand the risks, and contact the Tennessee Securities Division for detailed background information about those who sell securities or give investment advice, as well as about the products being offered.
The Tennessee Securities Division can be reached at 615-741-2947 or via our website.