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Across the nation, college students are setting themselves up for success during the upcoming semester with an expected spending of $86.6 billion on school supplies, more than doubling expected spending for K-12 students. For many young adults, attending college provides a sense of independence and serves as an entry point to establishing their financial health for years to come. Whether purchasing a vehicle, opening a line of credit, or taking out student loans, many financial decisions college students make have long-lasting effects that follow them after graduation and into their professional careers. According to CollegeBoard.org, the average student loan debt among borrowers who graduated in 2021-22 was $29,400. Adding in potential debts for car notes, credit cards, or other purchases, many students begin their post-college careers by spending years settling balances.
To make matters more challenging, BBB’s 2023 Scam Tracker Risk Report found that 18- to 24-year-olds reported the highest median losses to scams across all age groups for the second year in a row. Consumers within this age group lose $155 per report, 64% more than the baseline median losses of $100 across all age groups. Young adults are particularly susceptible to employment, online purchase, and investment/cryptocurrency scams.
“As the beginning of another school year approaches, BBB is keeping a close eye on employment scam reports, which typically increase during times of the year associated with major transitions,” said Heather Massey, vice president of communications and community relations for Better Business Bureau serving the Heart of Texas. “College students are a prime target for an employment scam because the fraudulent offer matches exactly what they need – a remote working opportunity with flexible hours and high pay. Adding in that many students are unfamiliar with standard hiring processes for remote positions, and you have a recipe for vulnerability.”
In addition to the financial costs of an employment scam, many people who provide sensitive personal information to a fraudulent employer place themselves at an increased risk of experiencing identity theft. Typically framed as a requirement to begin work, fraudulent employers collect tax or banking information, which can lead to various identity-related issues, such as Stolen Identity Return Fraud. Some of the most common positions used in an employment scam include package reshipment, data entry, or secretarial work, which heavily leans on work-from-home convenience. Unfortunately, the emphasis on digital interactions to carry out a scam is not limited to fraudulent employment.
Although the rapid adoption and use of digital marketplaces has greatly benefitted legitimate businesses with the ability to reach a broad audience beyond geographic limitations, it has also provided an avenue for fraudulent or unethical sellers to use deceptive practices to mislead consumers into purchasing items that are never received, counterfeit, or otherwise unusable. In Texas, consumers have reported $1.1 million lost to these scams in 2024, with most interactions beginning on social media.
“Individual losses to an online purchase scam are hovering around $75 this year, which is relatively low compared to some of the most costly scams, such as investment,” said Massey. “What distinguishes these scams is the sheer number of occurrences. In Texas last year, BBB received 1,800 reports of an online purchase scam that resulted in residents losing $1.5 million.”
Clothing, pet products, travel mugs, and electronics are some of the most popular products in an online purchase scam, but high-priced items such as automobiles or recreational vehicles are also commonly used. In nearly all cases, victims do not realize they’ve encountered a scam until attempts to contact the company regarding the status of an order go unanswered, the received product does not reflect the advertisement, or they discover multiple additional charges on the provided payment method. Some consumers find they have unknowingly signed up for a subscription service that is difficult or impossible to remove due to an unresponsive customer service department, leading them to cancel or close payment accounts to prevent reoccurring charges.
Although the challenges associated with employment and online purchase scams are significant, investment and cryptocurrency scams have become the riskiest consumer scams. In 2023, more than 80% of people targeted by these scams reported losing money, with a median loss of $3,800. This year, Texas residents have reported $2.1 million lost, outpacing the second-costliest scam by $1 million.
Investment scams are not modern inventions, but many new technologies are making it easier than ever for anyone to enter the investment scene, opening countless opportunities for fraudulent traders to target young adults. Using the reach and engagement of social media, con artists create highly engaging content and position themselves as an expert source of information, capitalizing on confusing financial terms and unclear processes. When a victim tries to withdraw from a fraudulent fund, the scammer claims they must pay a series of service, withdrawal, or tax fees before it can be accessed. Even if the fees are paid, the scammer disappears with the remaining deposit, access to the investment dashboard is disabled, and many deactivate the social media accounts they used to initiate contact.
As they return to campus this year, it is essential that college students can recognize the warning signs of employment, online purchase, and investment scams. However, they should also keep an eye out for fraudulent apartment listings, fake credit cards, and other identity theft risks.
For more information on how to navigate the back-to-college shift, visit BBB.org/School.