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Millennials fall for investment scams a lot — even more than boomers

Scam corrupted computer
An FBI report shows that millennials, not the elderly, are most likely to lose money on investment-related frauds or scams.Getty Images
  • Americans aged 30-49 are most susceptible to investment fraud, according to an FBI report.

  • People in the US lost $4.57 billion in fraudulent ventures in 2023, most of that from crypto scams.

  • Complaints and losses from investment scams have both skyrocketed over the past few years.

Millennials may not be sending their life savings to Nigerian princes, but that doesn't mean they can't be scammed.

Americans between the ages of 30 and 49 are the most likely group to be victims of investment fraud, according to a recent FBI report. That group reported over 13,000 complaints to the FBI's Internet Crime Complaint Center, or IC3, last year.

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Breaking that down further, those aged 30-39 reported 6,654 complaints related to investment scams last year. The 40-49 age range, which partly includes the eldest of millennials and some of Gen X, reported an even higher number of investment scam complaints, with 6,680 in 2023. The FBI notes its data on age ranges only included complaints in which the victim included their age range.

Older people are traditionally seen as most susceptible to scams, online or otherwise; they account for " well over half" of losses to tech support scams, noted FBI cyber-crime official Timothy Langan in the report.

But for investment fraud losses, boomers, or those over 60 — which are, in theory, the largest demographic group — came in third, with 6,404 investment scam complaints filed to the FBI last year. That would indicate they are not as susceptible to shady financial ventures as their children are.

Losses from investment scams topped the list of any crime type tracked by the IC3 in 2023, at $4.57 billion — a 38% increase from last year. The volume of complaints also skyrocketed, from just over 20,000 in 2021 to nearly 40,000 in 2023.

That increase is largely due to the rise of cryptocurrency, the report suggests, which is less regulated and more easily manipulated than other financial markets. Crypto-related frauds cost investors $3.94 billion in 2023, per the report, making up over three-quarters of last year's investment scam losses.

Scammers often attract victims through online ads and social media posts, the Federal Trade Commision warns, and promise large returns with little to no risk.

After contacting prospective victims, scammers may claim they have a "secret" or "proven" investment strategy and offer faux training and products, according to the FTC. Alternatively, they may direct victims to a specific site or app to invest their money, while pocketing the money themselves; they may even send fake investment reports and urge further investments.

Scammers often target the social media accounts of high-profile figures, sometimes replying to posts with a fake account designed to mimic the genuine one; in 2021, a German man made headlines after he lost $560,000 worth of bitcoin to a scammer posing as Elon Musk on Twitter. The man from Cologne — whom the BBC gave a pseudonym — described giving away his fortune in the mistaken belief that Musk would double his money.

To avoid potential scams, investors should be wary of get-rich-quick schemes — or as one scam victim put it: "avoid seduction." Even with ventures and stock newsletters that appear legitimate, investors should always do their due diligence, he suggests.

The FBI is more direct, saying investors should never send money or release financial information to any individual they have never met in person.

Read the original article on Business Insider