The amount of money lost to fraud and scams skyrocketed in 2021, yet Canadians in Generation Z are less concerned than their older counterparts.
As a result, they also take fewer preventive fraud measures — screening phone calls, closely reviewing credit card and bank statements, changing online passwords frequently and checking credit reports frequently — than older Canadians, according to a recent survey by Equifax Canada.
While most Canadians think fraud and identity theft are serious issues, those aged 18 to 24 say they’re less worried about it (75 per cent) compared with the average Canadian (90 per cent).
It's quite likely there’s a misconception among young people that because they’re young and often more technologically savvy, they’re less likely to fall for scams, said Julie Kuzmic, Equifax Canada’s senior compliance officer of consumer advocacy.
“I think there may be a bit of false confidence,” she added, given that Gen Z, like other demographics, lost a substantial amount of money to fraud in 2021.
A TD Bank survey released earlier this month reported a similar trend. Just 47 per cent of Gen Z respondents said they felt vulnerable to fraud compared with 56 per cent of millennial respondents and 52 per cent of Canadians overall.
“If I was to hypothesize why they feel that way, it could be that they’ve grown up entirely in an era of social media where the sharing of information just seems so prevalent," said Mohamed Manji, vice-president of fraud strategy at TD Bank. "And, they haven’t experienced (fraud) necessarily themselves or don’t talk about it enough and know others who may have.”
The Canadian Anti-Fraud Centre (CAFC) reports that Canadians of all ages lost $379 million to scams and frauds last year, a rise of 130 per cent compared with 2020. Approximately $26.6 million of that amount was lost by young adults around the ages of 18 to 35, and that number is much likely higher since fewer than five per cent of fraud victims file a report.
According to reports filed to the CAFC, young adults were most affected by extortion, requests for personal and financial information, and job-related fraud in 2021. In the latter case, fraudsters recruit victims via popular job listing websites for positions like mystery shopper, personal assistant, financial agent or debt collector, and then give fake payments while asking the victim to send money to a third party.
When it comes to dollars lost, though, young people lost the most money to investment scams ($11.8 million), followed by extortion ($4.9 million) and romance scams ($3.7 million).
While investment scams happen less frequently than other types of fraud, they can have a large impact on the victims when they do happen, Manji said.
And young people aren’t alone in being affected. The CAFC reported that Canadians lost a combined total of $136.9 million to investment scams in 2021, making it the most financially devastating reported scam in Canada.
“With investment scams, victims are misled into giving large sums of money, and in some cases all their savings, toward phoney investment opportunities,” Manji said.
“It’s always about investing in something that is probably too good to be true … We see the scams happening over the phone, through unsolicited calls, and online as well. Even in social media feeds.”
These types of fraudsters will use pressure tactics to exploit a fear of missing out and make their victims act quickly, convincing them they’ll get higher returns, he said. In some cases, they’ll also label investments as “risk-free.”
Any time you’re given unsolicited advice, act with a sense of skepticism and take your time to research who is contacting you, Manji said. When it comes to investment scams, that can mean verifying that investment companies are actually registered with provincial securities agencies.
“Don’t let pressure tactics force you into making decisions without a moment of pause and consideration,” he said.
Manji said to also apply that same level of skepticism when it comes to receiving emails or links from unfamiliar email addresses.
In addition to only opening safe emails, he advises young people to use protection software that safeguards against hacking and strong and complex passwords that differ for each account. Further, people should be careful not to give away any personal information to an unverified source.
“It’s important to take note that fraud can happen to any demographic and that no matter what your background or educational level or how tech savvy you might think you are, fraudsters don’t really discriminate,” Manji said.
“They continue to adapt and evolve their approach.”
This report by The Canadian Press was first published March 15, 2022.
Leah Golob, The Canadian Press