Jim Winsett of the BBB. Q. What age group is most likely to be scammed and victims of fraud?
A. Very timely question, a new Better Business Bureau report cites surprising new data about who is likely to be more vulnerable than average to scams. The inaugural BBB Scam Tracker Annual Risk Report found men to be more susceptible than women, and 18-24 age groups with the highest risk and median loss of monies.
The BBB watches for trends in scams and schemes. This report analyzed more than 32,000 reports made to BBB Scam Tracker in 2016. While there is no doubt that scams have gone high-tech, the most high risk scam is the face-to-face home improvement scam. Fake check scams run a close second.
The data show a marked trend toward decreased susceptibility with increasing age. Men were at a higher risk than women in seven of the top 10 scam categories. Consumers 18-24 are the most likely to sustain losses. But older consumers generally earn more and have higher median losses; this is due in part because of the types of scams targeted at them.
The big takeaway from the report is that no one is immune from fraud.
The BBB Risk Index measures three dimensions:
- Exposure: How likely are you to be exposed to scam and fraud?
- Susceptibility: If you are exposed, how likely are you to lose money?
- Monetary loss: If you do lose money, how much is it likely to be?
Exposure times susceptibility times monetary loss equals the risk index score.
The top five scams in the report are:
1. Home improvement
2. Fake checks and money orders
3. Employment scams
4. Online purchase fraud
5. Advance-fee loans
By far, the scam most reported to BBB Scam Tracker in 2016 was not any of those listed. It was the IRS tax scam. However, with the scam's duration and education, consumers are savvy to this con and rarely fall for it. In turn, it did not even make the index's top 10. As example, employment scams were three times as risky.
Home improvement scams are the only category in the top 10 to rely on in-person contact. Because of the highly personal nature of this scam - someone literally at your doorstep - the exposure rate was low but the susceptibility rate and the median loss were both very high. Con people are usually good at selling the fraud.
If you would like to learn more, the full report is available to bbb.org/Risk Report. Consumers and businesses are urged to report all scams to BBB Scam Tracker at bbb.org/scamtracker, regardless if money is actually lost. Individuals reporting a scam are most often motivated by a desire to warn others rather than the hope of recovering lost funds or bringing the perpetrator to justice.
The conclusion and message from the report is that "together, we can and do make a difference in the fight against marketplace scams."
Jim Winsett is president of the Better Business Bureau in Chattanooga.