How to protect your child against online finance scams
The internet is a wonderful invention of modern life. It’s how we connect with family and friends, learn new things, do our shopping, book our holidays and entertain ourselves.
But the internet has its less charming aspects – with online finance scams being a widespread problem.
According to UK Finance, losses from bank transfer scams jumped by 71% to £355m during the first half of 2021. Cybercriminals are targeting children as young as 14 via social media and exploiting their naivete to make money illegally.
Young people tend to fall faster for scams than their older counterparts. Studies found that 20% of people aged 16-34 had been scammed in recent years, compared with 4% of those aged 55 and over.
As a parent, it’s natural to feel concerned given our growing dependency on the internet. But there are certain things you can teach your child to watch out for to help them stay safe online.
Common online scams targeted at teenagers
Here’s a list of tactics scam artists often use to trick young people into emptying their bank accounts.
Online shopping scams
According to the consumer group Which?, online shopping scams are the most reported types of fraud. These scams involve fraudsters pretending to be legitimate online sellers. They can create fake websites that mimic authentic retailers, with familiar logos, slogans and even domain names that teenagers can easily mistake for the real things.
Many of these websites offer luxury items at super low prices – some once-in-a-lifetime deals. If you receive your purchases, they’ll be complete knockoffs. Most of the time, you’ll end up waiting in vain.
Social media scams
Many teens rely heavily on social media channels like Instagram and Facebook to stay connected. So it makes sense that fraudsters will choose these frequented digital playgrounds to target teens.
Scammers may create fake social media accounts that look like influencers and hold contests that ask the participants to provide their personal information and bank details. They can also try to befriend your child and trick them into clicking a phishing link to obtain sensitive data like usernames and passwords.
Job scams
These involve scammers posing as employers or recruiters and advertising fake job openings that usually sound too good to be true. The ultimate goal is to get their victims’ personal information such as national insurance numbers and bank details.
Scholarship scams
It can be very expensive to attend university in the UK. For teens planning for their higher education, a scholarship can help ease the financial burden for them and their families. Scammers can exploit this vulnerability by creating phony scholarship scams. Some may ask the applicants to pay a small fee to process the application or urge them to reveal their personal information. Others might promise a ‘guaranteed scholarship’ – while this may sound tempting, legitimate organisations will never give away guaranteed scholarships.
Cryptocurrency scams
Recent research revealed that people aged under 25 are the most likely to be victims of an investment scam, accounting for 25% of all cases. Many of these victims said they were lured by fake social media ads promoting cryptocurrencies and meme stocks.
The crypto craze in recent years has opened doors for fraudsters to exploit this trend and trick young people into parting with their cash. Crypto scams come in different forms, for example:
Celebrity endorsement: This can involve unqualified influencers on TikTok or YouTube attracting amateur investors with get-rich-quick promises. Fraudsters also create online adverts using images of well-known public figures and fake testimonials to make their investment schemes look legitimate.
Initial coin offering (ICO) scam: Sometimes known as an exit scam, this is when fraudsters pretend they’ve created a new crypto coin and promote it as the next big thing to raise money from investors. Then they disappear into the ether after collecting investor funds.
How to fight back on scams and keep your child safe online
Knowing how to protect your child (and yourself!) is the best way to avoid potential online scams. Here are some tips you can teach your teen to help them spot scams:
Does it sound too good to be true? Then it probably is!
Never give out personal information online.
Avoid any unexpected contact. Be suspicious if a person or a company you don’t know contacts you out of the blue about a deal, offer or investment opportunity.
Inspect the address bar. Does it have a misspelling? Does it match the URL of the legitimate company website?
Watch out for limited or suspicious contact information. Reputable companies will always list different ways to contact them on their websites.
Use strong, unique passwords containing a combination of letters, numbers and special symbols. Don’t use the same password for multiple accounts.
Keep your operating system and antivirus software up-to-date.
Stay vigilant when you see new brands or companies pop up on your social media feeds. These can be scammers masquerading as advertisers.
Look out for grammar errors and dodgy spellings in social media posts, emails and any communication.
Shop with companies whose payment pages have security encryption. Don’t pay by wire transfer, money order or gift card – websites that require these types of payments belong to scammers.
Use safe and secure WiFi connections. If you need to use public WiFi, avoid using apps with sensitive information, such as mobile banking.
Never pay to enter a contest, get a job or apply for a scholarship.
If someone tries to pressure you into buying something now or making an investment quickly, that’s a red flag. Don’t rush into making a decision. Investing involves risks, even if you’re not being scammed. So take your time to seek professional advice and do your homework thoroughly.
Fraudsters are getting more sophisticated nowadays. Just because a company has a glossy website and glowing reviews doesn’t always mean it’s legitimate. Remember the first rule, if something sounds too good to be true, it probably is.
Where to get help
It can be worrying if you suspect that your child has been a victim of fraud. Here are some trusted organisations that offer support and advice to scam victims.
Action Fraud is the UK's national fraud and cyber reporting centre. You can report a scam or fraud to them by calling 0300 123 2040 or using their online reporting tool.
Take Five is a UK campaign offering simple and impartial advice to help you avoid email, phone and online fraud.
Victim Support is an independent charity offering support to victims of crime and traumatic incidents in England and Wales. Talk to them if a scam has made your child feel anxious or guilty.
The Financial Conduct Authority (FCA) runs a ScamSmart campaign that provides information on how to avoid investment scams.
