Online Buying Fraud Is on the Rise

Younger consumers are more susceptible to scams, but older shoppers have more to lose

If a deal seems too good to be true, it probably is.

Online buying scams were the biggest type of consumer fraud in 2017, according to the Better Business Bureau's (BBB's) annual scam-tracking report—up from fourth place a year earlier. The rise of digital shopping and growing comfort with sharing personal information online are factors in this growing category of fraud.

At its most basic, consumers pay for something they never receive, which according to the BBB involves pets and clothing more than other types of online purchases. Most cases involve credit card payments.

The report broke down susceptibility and loss by age, and very clear patterns emerged. Digital methods like text, email or websites were the leading method of interaction across all generations, though digital contact was highest for the youngest group and decreased by age.

On the surface it is a little surprising that younger consumers were more often subjects of scams than older generations—since seniors in particular are often stereotyped as easier targets. In fact, 18- to-24-year-olds made up 25% of victims, while 13.2% were 65 and older. Despite youth being easier to con, they lost less money when it happened than their elders, presumably because older adults have more financial reserves to draw on.

This closely mirrors findings from the Federal Trade Commission that were also released this week. Some 40% of US consumers ages 20 to 29 reported a fraud loss in 2017. This dropped to 32% for those 30 to 39, ranged from 20% to 28% for those between 40 and 69, then dipped to 18% for consumers 70 and older. Monetary loss didn't follow such a neat and tidy pattern, though consumers in their 20s lost a median of $400 compared with $1,092 for the oldest segment.

It's possible that a greater sense of trust and consequently a freer sharing of sensitive information relates to scam susceptibility. A McAfee survey of US internet users in November 2017 gauged consumer attitudes about companies that collect and use personal data. Around one-third (32%) of respondents ages 18 to 30 felt confident it was under their control, while only 21% of those 50 to 55 were so confident.