In the past year alone, almost three in ten (29%) 18-34 year olds have fallen victim to a scam or fraudulent activity causing them to lose money or have had their personal details compromised.
• One in ten (11%) fell victim to fake online financial promotions
• 10% were targeted by computer or app hacking
• 7% bought a product online that did not exist in real life.
The research revealed that a much higher percentage of younger people have been caught by an online scam in the last 12 months than the overall population (29% versus 17% overall).
This research comes as Phoenix Group has written to the UK Government asking them to take urgent action in the upcoming Online Safety Bill to protect those saving for retirement from fraud. The letter states it is vital that the Online Safety Bill, expected to be announced in the Queen’s Speech on 11 May, forces social media companies to verify adverts carried on their platform. This will help to ensure that fraudsters are no longer able to pay to advertise pension and financial scams with impunity and that people saving for their pension can be safe online.
Rising fake financial advice
During the pandemic, half (49%) of all 18-34 year olds looked online or on social media for financial information, with a quarter (26%) using Google or other search engines to inform themselves, a fifth (20%) using YouTube, while 18% have turned to TikTok and 15% to Facebook.
Scammers have clearly seized this opportunity, as half (49%) report they have received unsolicited financial advice, with 21% receiving it via social media and 20% through online search engines. Meanwhile, a third (36%) of the overall population have received unwanted financial advice in the last year, predominantly via email (18%).
However, younger generations appear less suspecting than older age groups, with just a third (35%) of those aged 18-34 feeling the advice they received was suspicious or illegitimate, compared to 58% of those aged over 55.
Overall, among those who received suspicious financial advice and lost money as a result, the average amount each lost was almost £2,0002 per person.
Tommy Burns, Risk and Financial Crime Manager at Phoenix Group, said: “The number of scams reported has increased in the last year, and online scams have been particularly rife. Scamming techniques evolve as new technologies and platforms emerge, and fraudsters are capitalising on this, targeting a new generation of victims. We’re therefore urging the Government to address this as a priority in the Online Safety Bill.
“It’s also really important that young people are aware of the latest financial scam tactics. For example, offers of unrealistically high financial returns or free pension reviews are often too good to be true, and we would urge anyone that’s being lured by these sorts of promises to check out their credibility before acting further. Taking the time to check that a website is secure before sharing personal details, inspecting the URL, or simply asking whether a deal sounds too good to be true could stop you being a scammed.”
Taking responsibility
When it comes to protecting people from fraudulent activity and financial scams, Phoenix’s research shows that consumers believe that online platforms and social media providers should take some responsibility (46%), while 51% think the duty lies with financial institutions and 39% think the Government should be accountable.
Phoenix shares guidance on how to spot an online or social media scam:
1. Check a website’s security measures – especially before sharing personal information. Look for the closed padlock symbol and https:// in the address bar of your browser, the letter ‘s’ stands for secure and means your data is encrypted. Genuine websites will have a certificate from a trusted certification authority (CA) demonstrating that they are safe and secure for users, this certificate forms part of the https process. You can view this certificate information by clicking on the padlock in the address bar.
2. Don’t allow yourself to be pressured into making a decision quickly. Pressure to make quick decisions may well increase the chance of you making a poor decision and is also an indicator of suspicious activity.
3. Think about the contact you have received. Is this how the company usually contacts you? Would your normal provider really text you about a financial opportunity? Think about whether it's sensible for the company to make contact in that way.
4. If it sounds too good to be true, it probably is. Sometimes an offer may be articulated in a way that will not arouse suspicion. Think very carefully about the risks.
5. Don’t hand over personal data until you know the company you are dealing with is regulated. If you have already done this and are concerned about how it might be used, contact your provider who can add additional security levels to your plan to provide further protection.
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