The inexperienced and trusting nature of young people is often what causes them to fall victim to scam artists. Some scam artists know how to identify and take advantage of teens and their need to fit in. Also, because teens are often so involved in new technology and web-based interactions, it's no surprise that many scammers have found the Internet to be the optimal environment for preying on teens.

Inexpensive Luxury Goods
Have you ever seen ads online for cheap iPhones, electronic gadgets, designer clothes, handbags and other luxury goods being sold at just a fraction of the retail price? Many of these advertisements are simply scams aimed at unsuspecting individuals who are looking for a good deal. However, these scams don't only exist online. Teens can be approached with too-good-to-be-true offers just about anywhere. Sadly, in many cases, these cheap goods don't even exist. After these teens hand over their money to the scam artist, they never receive the promised merchandise. Sadly, these teens are often so embarrassed about being duped that they won't tell their parents or the authorities, so many of these scams are unreported.

Information Farming
The naivety of youth often makes it easier for would-be identity thieves to phish for information, as adolescents don't even realize that they're handing over personal information that can be used for identity theft. Many of these scams operate online, making use of emails or pop-up windows that ask for verification of account information, social security numbers, credit card information or any other kind of personal data. Other versions of this scam include false employment opportunities that require the applicant to give personal information, as well as false credit card application forms.

Contests
Some scammers run contests where the odds of winning are virtually nil and some of them don't even hold contests. These scams may also focus on gathering personal information as a means of identity theft. Similar scams exist in the form of literature or art competitions where creative young people can submit their work in the hopes of winning a prize or have their work published. Once the work is published, the teen is then asked to pay a sum of money for the published book or required to send money with the opportunity to win an even larger prize.

False Investments and Money Transfers
Investment and money transfer scams operate in many different ways. Although these scams don't necessarily target teens, they may be more likely to fall victim to them. The victim will generally receive an email from a foreign businessperson who claims to need help moving funds abroad. Perhaps the victim will get an offer to invest in a great opportunity with huge payouts (often known as a Ponzi scheme). Although many of these scams operate in the online world, they exist in other forms as well.

Scholarships and Grants
Many young people are looking toward their futures and this may cause them to fall victim to scams surrounding false scholarships or grants. Many of these offers are attempts to steal personal information from students who may be looking for financial aid, though many scholarship scams focus on charging money for information on potential scholarships that may or may not actually exist.

Another scam targets young college students who have accrued debt from legitimate student loans. These older teens may be approached by people who offer to help eliminate student debt in exchange for a small fee. Once the fee is paid, the fraudster disappears without eliminating the student's debt.

Online Auctions
Auction scams have been found to target unsuspecting teens in various ways. One scam involves an auction for an item that doesn't exist or never arrives. The buyer has paid for merchandise that he or she never receives. Alternatively, when an unsuspecting teen has put one of his or her items up for auction, a buyer suggests that the check is on its way, but urges the teen to send the item anyway. The funds never arrive and the teen has now given away his or her valuables for nothing.

Cell Phone Companies
Many teens carry around their cell phones wherever they go, creating a vehicle for potential fraud. Many teens want to personalize their gadgetry with new ringtones and wallpaper images. Some companies target teens for these "free" services that send new ringtones and images on a regular basis. However, what they don't advertise is that this service comes with a hefty fee that'll be added to the phone bill each month. Many of these fees appear on the phone bill with ambiguous terms that aren't easily understood by consumers, making it difficult for parents to realize what they're paying for.

The Bottom Line
It's important for parents to teach their children that if anything looks too good to be true, it probably is. If you're a parent, take the time to discuss the types of information that scammers are looking for, and make your children aware of any potential scams. Even if you need to repeat yourself, remember that it's always better to be safe than sorry.

Related Articles
  1. Entrepreneurship

    Multilevel Marketing Isn't Always A Scam, But It Often Is

    Nerium and Amway are popular direct sales companies that recruit new buyers and sellers to make a profit. Sadly, many direct sales firms are scams.
  2. Retirement

    5 Reasons Millennials Lead in Saving for Retirement

    Say what you want to about millennials but the one thing they are doing better than any other generation is saving for retirement. Here's why.
  3. Your Practice

    Advisors: $240B in Fees Up for Grabs by 2030

    Advisors have an opportunity to win generational assets over the next 15 years. Here are some tips on how to cater to different demographics.
  4. Your Practice

    Top Insights Into Winning More Wealthy Clients

    The upcoming young and wealthy client class is like none other when it comes to wealth advising preferences. Here are some hints to what these folks want.
  5. Your Practice

    Advisors: Win Over Millennials with Insurance

    Millennials don’t have the same values and goals as previous generations. Here are some tips on how advisors can adapt to their needs and wants.
  6. Financial Advisor Technology

    Advisors: Don't Mix Robo and Traditional Services

    Here's why it makes sense for financial advisors to offer traditional and robo-advisor services separately.
  7. Economics

    Why Enron Collapsed

    Enron’s collapse is a classic example of greed gone wrong.
  8. Savings

    The Generation Gap in Retirement Savings

    Baby Boomers may be closer to retirement, but compared to Millennials, they’re less likely to be on track with their savings.
  9. Insurance

    What's Better: Whole Life or Term Insurance?

    Life insurance can be a difficult decision to make, especially for a young adult. Here's a look at the benefits and costs of getting whole life insurance.
  10. Your Clients

    Why the Young and Rich Fire Their Advisors

    The top reasons why affluent Millennials fire advisors may sound a little unusual. Here's what advisors should know.
RELATED FAQS
  1. What are some high-profile examples of wash trading schemes?

    In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
  2. How should a whistleblower report unlawful or unethical behavior?

    Whistleblowing takes many forms. A whistleblower could expose government corruption, expose unethical business behavior or ... Read Full Answer >>
  3. How do insurance companies use a whistleblower?

    Fraudulent claims are among the most prevalent and serious business risks that insurance companies face. Many consumers have ... Read Full Answer >>
  4. What are examples of inherent risk?

    Inherent risk is the risk imposed by complex transactions that require significant estimation in assessing the impact on ... Read Full Answer >>
  5. What does the American Dream mean to different generations?

    The American Dream at its core is the belief that every generation should enjoy greater prosperity than the generation before ... Read Full Answer >>
  6. What were the primary financial crimes involved in the ZZZZ Best case?

    ZZZZ Best was a company started by Barry Jay Minkow that claimed to be a carpet cleaning business. In fact, it was a Ponzi ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center