They Say Crime Doesn’t Pay Yet Fraudsters Keep on Trying

online fraud

Fraudsters defraud. It’s their job, just as it is for the equally committed army of digital warriors who are paid to combat them.

In the middle, there are victims, both consumers and businesses, who are targeted in new ways every day and everywhere.

In examining those targets, new findings in the Federal Trade Commission’s Consumer Protection Data Spotlight revealed some stunning revelations about who’s getting scammed the most, and by what means.

In short, when it comes to fraud, the FTC found that engagement, not age, was a primary factor in becoming a target and a victim in what it called “A Story for All Ages.”

“In 2021, Gen Xers, Millennials, and Gen Z young adults (ages 18-59) were 34% more likely than older adults (ages 60 and over) to report losing money to fraud,” the study revealed, countering conventional wisdom that cyberthieves prey on the elderly.

Viewed another way, it seems that life experience — and probably having already fallen victim to scams along their journey — saw older Americans being less prone to most online scams.

That said, while older adults were more than twice as likely to report losing money on a fake prize, sweepstakes or lottery scam, the number of digital-savvy younger consumers folks falling for online swindles were also way up.

According to FTC analysis, 18- to 59-year-olds were 330% more likely to fall for “too good to be true” cryptocurrency investment scams, and 86% more likely to be tricked into bogus online deals, that often start on social media and move to purchasing items that never arrive.

The big take away is that while digital natives may be smart and more comfortable with remote commerce, they can be outsmarted — at scale — by a convincing fake.

Full story: Young Digital Natives Getting Scammed in High Numbers

P2P Users and Merchants Get Vigilant … Or Else

Our second Weekender fraud insight looks at what happens when a merchant fails to protect consumers from this kind of slick online theft, because right or wrong, consumers get understandably upset and often just bail.

In fact, the December Digital Fraud Tracker®, a PYMNTS and DataVisor collaboration, found unequivocally that consumers who face negative experiences such as fraud are less likely to use the same merchant again.


“A smooth experience every step of the way is non-negotiable,” the study said. “This becomes even more urgent, considering that 56% of buyers said they would share bad experiences with colleagues and coworkers, causing potential loss of clients and revenue in the future.”

Not only this, but the report also noted the rise in peer-to-peer (P2P) payments fraud, where consumers are increasingly using and enjoying the convenience of instant payments via apps such as Venmo, Cash App and Zelle.

“As the use of these faster payments has increased and become mainstream, however, so have fraud-related issues,” the study surmised, with 23% of P2P platform users having sent funds to the wrong person, and 15% having fallen victims to at least one scam.

Digital Fraud Tracker®

Getting Sneaky With Sneakers

Lastly, we got a unique and up-close look at the problem from a retailer’s perspecitve on fraudulent chargebacks in an interview published Friday (Dec. 9) with Cole Richman, owner and founder of Bottom Bunk.

Richman — an ex-convict turned entrepreneur — told PYMNTS’ Karen Webster how brazen thieves purchased large quantities of sneakers from Bottom Bunk’s store and website then disputed or charged back the transactions claiming they’d never bought them.

For any merchant, these revenue reversals and delays can be costly and confusing, but for a small business they can be ruinous.

Richman shared his story alongside PayPal Senior Director Sandipan Chatterjee, as it was PayPal that stepped in and helped Bottom Bunk recover from the $500,000 chargeback crime spree.

If a chargeback on a shoe happens, Richman said, it’s a triple loss for his business.

“We’ve lost the shoe, we’ve paid the consigner and we’ve lost the money,” he said, reflecting on the school or hard knocks education he had received at the hands of thieves.  “Chargebacks, in my business, are probably the most impactful thing, and can hurt us the most,” he added.

The Weekender’s takeaway amid the evolving and indiscriminate froth of fraud is simply caveat emptor.

Stay informed. Be skeptical. Protect yourself.