Last month, I co-hosted a webinar with Javelin Strategy & Research, “Growing Fraud Risks Facing Millennials, Gen X and Boomers.” It showcased new research surrounding different identity risks and protection preferences for each demographic.
(Missed the webinar? No worries, view the recording now.)
We covered a lot of information, but one attendee’s pre-webinar question peaked my interest. They asked what financial institutions should be doing to educate consumers? The first thing that came to mind in terms of underserved-education — scams.
Scammers are Getting Smarter
The Better Business Bureau estimates one in five consumers falls victim to a scam each year. And the average scam victim loses $247. However, prices vary significantly based on the type of scam. Romance/online dating scams hold the highest average loss at $2,373.
The estimated financial impact of scams on the economy is pegged at $50 billion.
These high losses stem from scammers’ growing sophistication. While scammers haven’t totally given up on their more obvious approaches (like Nigerian Prince emails or door-to-door sales gimmicks) they have certainly upped their game. Many now employ social engineering schemes and take advantage of the globalization of social media and connected technologies.
Standard Banking Practices Fall Short for Scams
Scams often fall in the grey area of banking and identity crimes.
Scammed consumers are rarely protected by zero liability policies. After all, they did authorize the transaction. It can take a toll on the account holder-financial institution relationship.
Javelin Strategy & Research reports 48 percent of consumers see themselves as the primary protector of their identity. And 42 percent see their financial institution as second most responsible for protecting their identity.
It’s critical that financial institutions work with account holders to help them better protect themselves from identity crimes — as this shared-responsibility also includes scams. So how can financial institutions help account holders stay safe?
Effective scam prevention starts with education.
Create Your Scam Education Program
Consumers want to be empowered and in-control. They know scams are out there, and often seek help from a trusted source — like you. Below are resources to help lay the groundwork for a successful scam education program in your bank or credit union.
1. Identify At-Risk Consumer Groups
Different consumers face different scam risks. Some key factors in gauging risk include age, gender, location, military status and if they are a student. Fast facts:
- Young adults are 3x more likely to experience a scam, but the elderly suffer 2x the average loss.
- Men lose $361 on average to scams, while women lose $249.
(Plus, men are more likely to fall for a scam in general.)
- Consumers in the South and Midwest have the highest average scam losses.
- Military members and students have a higher general scam risk.
(Fake check/money order scams are the top schemes targeting both groups.)
Develop content that is appropriate to each consumer subset — whether that be reaching Millennials via social media or targeting Boomers with curated educational content. When you understand your audience, you can better assess and mitigate their risks.
2. Create Your Scam Education Stockpile
Your educational arsenal should include prevention, detection and resolution tips for major scams. Ensure content is easy-to-understand but doesn’t glaze over important details. It should be written by a trusted professional in the space, who has time to stay on-top of the latest scam news.
At EZShield, our experts are constantly churning out the need-to-know details of the latest scams. We relay this information on our educational blog FightingIdentityCrimes.com.
This content is also available to our partners via our Live Fraud Feed.
The Live Fraud Feed is an RSS feed that is embedded right on our partners’ websites. After a simple one-time set up, the Live Fraud Feed automatically populates the latest identity crime news and educational content. It helps our partners stay relevant without ever lifting a finger.
3. Relay Information In-Branch and Online
Reach every account holder with accessible educational content. Ensure your Scam Educational Program utilizes as many touchpoints as possible, including email, social media, web and in-branch.
At EZShield, we arm partners with the tools they need to engage and empower account holders. Here’s a little of what’s hiding in our partner tool kit:
- Targeted, demographic-specific marketing and outreach materials
- Timely email scam and breach alerts
- Educational fliers and fact sheets
- Scam awareness social media posts
- Digital infographics
- Online scam education (with prevention tips)
- 24/7 support for scam victims
- Mobile app for on-the-go protection
- Videos, webinars and other multi-media outreach efforts
- Employee training and promotional aids (wearable pins, fliers, etc.)
When you stand behind your account holders, especially when it means going above “standard” practices, it drives loyalty and creates an unparalleled banking experience. With something as prevalent as scams, I can’t think of a better place to start.
What scams are on the radar of your bank or credit union? Share your scam story in the comments.