When your child becomes a teenager, they enter an exciting world of new opportunities. They get a job, start to drive, and eventually begin their adult life. Unfortunately, this freedom has its share of risks. Scammers often prey on teenagers because they’re young and have less experience with money.
By educating yourself and sharing your knowledge with your child, you can help your teen keep their money safe. Learn more about avoiding financial scams and a few quick ways to identify them.
Financial scams occur when someone tries to trick you into giving them money or information through misleading or deceptive techniques. Financial scams take all shapes and forms, from identity theft to investment fraud, to phishing scams. Anyone is vulnerable to financial scams, but scammers often target the very young or old, believing they’ll be more trusting with their money.
If something seems too good to be true, like a 200% return on investment, it usually is. That’s the first and most obvious sign of a financial scam. Other red flags include:
Talk to your child about keeping their information safe. Explain what type of data scammers might want and why they want it, such as stealing a Social Security number to apply for a credit card. You should also discuss specific scams targeting young people so that your teen keeps an eye out for these potential pitfalls.
What teenager doesn’t want a new smartphone or gaming system? Scammers know teens’ weaknesses all too well. Scammers might post online ads for the latest must-have luxury goods priced at a fraction of their retail price, trying to entice teens to buy them. Scammers usually use a picture that looks like the real item, but don’t actually have the item to sell.
Most often in these schemes, the scammer promises to send the luxury item in a few days, then disappears and won’t respond to calls, texts, or emails. Sometimes the scammer will send something, but it’s a cheap imitation of the real thing or an item that is completely different from what was promised. Teach your teen to avoid buying things from ads that pop up online or from websites that look questionable or have long, complicated URLs.
Every kid planning to attend college will jump at the chance to secure financial assistance for college. Unfortunately, scammers know this, and they often target high school and college students with promises of financial aid that never materialize. Educate your child about these scholarship scams.
Many teens spend a lot of time on social media. They may enjoy taking the surveys that pop up in their feeds, promising an interesting payoff such as “see who viewed your profile.” To complete the survey, teens must supply personal data, such as where they were born or their siblings’ names, under the guise of a “research” project. Explain to your child how this information can be used by scammers to access their online accounts.
Surveys may also ask teens to install software on their phones or laptops that can capture personal information, which the scammer can sell. The safest approach for teens is to avoid filling out any surveys online. Remind them that if they do take one, they should alert you so you can assess the situation.
Teens may feel embarrassed if they’ve been scammed and not want to tell you about it. When you talk to your child about financial scams, encourage them to speak up if they fall victim to a hoax. Their honesty can help you educate them and could save someone else from becoming the scammer’s next victim.
Learn more strategies for assisting teens and other children with their money on our WalletWorks page.