Amir Nooriala, Chief Commercial Officer at authentication product company Callsign, considers fraud, and how it’s affecting young people.
A misconception exists around fraud – that it’s an older person problem and young people are not affected by it. In fact, this could not be further from the truth. Despite having grown up with technology, there is growing research to suggest that younger generations are still very much vulnerable to fraud online.
Though older demographics are more vulnerable to being attacked via social engineering, the younger portion of society has in recent years accepted a lot of risk tolerance due to headlines about money being made through new methods such as cryptocurrency and NFTs. Sadly, this is being exploited by fraudsters who target those looking for ‘get rich quick schemes’, something that older generations do not generally pursue.
Over the past few years, for example, younger generations been lured in by investment opportunities online. Recent years have seen a ‘boom’ when it comes to cryptocurrencies, meme stocks and wider digital assets such as NFTs. According to Lloyds Bank, under 25s are the most likely to fall victim to an investment scam and investment scam victims lose around £8,585 on average. As we are experiencing a cost-of-living crisis and wider financial pressures in the face of a recession, ads that promise to make people rich quick seem all the more enticing and this gives scammers an easy in.
While most adverts online are legitimate, some for these kinds of financial opportunities are not – and with young people spending so much of their lives online, it’s by no means just the older generations being affected by fraud.
Social media companies need to do more, to stop scams and make platforms safer.
The social media giants are clearly not doing enough to stop scams and to make their platforms safer for users. In April this year Google and Meta pledged to only allow registered financial firms to advertise on their sites, but these pledges have only been made voluntarily and not all platforms have made them. Social media in particular has become a lucrative opportunity for fraudsters to advertise online and with many younger users, it is the perfect place to target them.
Social media platforms have also not taken enough action when it comes to ensuring that their users comply with rules around advertising. The Advertising Standards Authority issued enforcement notices in March this year to over 50 companies, instructing them to review their ads and to ensure they understand and are complying with the rules around advertising cryptocurrencies, so that consumers are treated fairly.
If it looks too good to be true then it probably is…
Younger people should remember that just because an advert is online, it does not make it any more trustworthy than a physical advert – if it looks too good to be true, alarm bells should ring. Research is always imperative when investing and it is worth checking the veracity of any company that advertises online and whether others have also trusted that company in the past. Fraudsters may also ask for payments and their changing identities can be tell-tale signs that they are not being genuine.
Digital identity is broken online and people can register to access social media platforms – where these ads proliferate – without proving exactly who they are – until this is fixed and proper authentication methods such as behavioural biometrics are put in place, fraudsters will continue to take advantage the anonymity social media affords.
It is clear the rise of fraud is affecting young people – from financial losses to the harm it can do to their mental health. Having grown up with technology is not a panacea for falling victim to online scams. But the blame should not rest with users and social media platforms need to do much more to keep them safe. Until the social media platforms do more to verify those on their platforms using the right technologies such as behavioural biometrics to keep the fraudsters out, the online crypto advert ‘scamdemic’ shows no signs of slowing.
What’s the answer?
Trust should not be assumed in a digital context, as it also should not be in a real-world context – the rules still apply. In a world where digital identity is broken, it’s important to remember that people may not always be who they say they are. Fraud, scams, bots, fake text messages and social engineering are symptoms of the wider issuer at play – we cannot prove beyond doubt who is someone is online. The resulting lack of trust in people’s digital identities will continue to be a weak spot until we can establish a better system – one that uses proper authentication to mitigate identity-based scams.
