Why financial scams are more prominent than ever

Mark Hamrick, Senior Economic Analyst at Bankrate, explains why there’s been such an increase in financial scams.

Transcript

00:00The Federal Trade Commission recently came out with a report, the number of older Americans

00:05who report losing more than $100,000 in one year to fraud has more than tripled since 2020.

00:13Just how big of a deal is this?

00:16Well, it's a very big deal. You think about the collective losses that, let's just say,

00:21our country suffers and then the huge personal impacts that these scams can have on individuals,

00:29households, and families. And the problem really is that as we, I'll say, celebrate and utilize

00:38technology tools, we're using comparable tools for the purpose of this interview, it also has

00:45facilitated a kind of ease for the fraudsters, the robbers, and the like. And so in that we are all

00:56connected electronically, this has opened up new methods, vehicles, and efficiencies for those who

01:05want to part us from our money. So what are some of the factors driving this increase in financial

01:11scams? Is it just the rise of the internet? Yeah, that's the primary method, whether it is,

01:18first of all, believe it or not, email or text messages. Those are the top two mechanisms

01:24with which or by which people are falling prey to these scams. And the third one is still the

01:31good old-fashioned phone call. Of course, you know, one of the most prized possessions

01:37we all have is our mobile phone. Maybe some people, a small fraction, including the elderly,

01:44have landlines, but it is ultimately the ways that we communicate and the tools that we

01:53communicate with that are helping to facilitate these scams. And let's just think about how much

01:59we're all inundated with these attempts to steal from us, constantly getting text messages and

02:06emails, many of which, if we're fortunate and use the technology in a favorable way, having those go

02:15to our spam folders. But the problem is a couple of things. Number one, as a society, we have many

02:24people who are digital natives, those who grew up with these technology tools, and then you have

02:30people who are more senior, who were analog creatures now living in the digital age, and

02:38many of them are not as, let's say, literate with the use of technology as their younger

02:45cohorts. Obviously, there are plenty of people who are more senior who are really on top of their

02:50games, but it just turns out that they're also perhaps more trusting, not as suspicious as

02:59they need to be when someone is posing as a company executive or a government official

03:07or something like that, where there is going to be an attempt

03:12to take their money or get access to their personal information.