Gen Z and Millennials are confident in spotting scams, yet are the first to jump into new investments
Are Gen Z and Millennials too clever for their own good? While these risk-tolerant investors may feel the most confident about spotting scams, they're also the most likely to jump into new investment opportunities, sometimes without conducting proper due diligence .
A recent survey by forex broker experts at BrokerChooser found that 76.22% of 25- to 34-year-olds are 'confident' they can spot investment scams, and 32.62% even said they are 'very confident.'
Across all age groups, 60.20% of respondents felt confident spotting scams—but only 16.8% were 'very confident,' with that number dropping to just 8.67% among those over 55. At the same time, a striking 91% admitted they would act in ways that could expose them to fraud.
When asked what they'd do when presented with a new forex investment platform 'pending regulation,' claiming to have 2,000 investors and offering returns of 15% to 20% per month, 35.67% of respondents aged 25 to 34 said they'd ask friends or family if they'd heard of it.
According to the report, this is a form of social proof that scammers often exploit.
Millennials (26.53%) and Gen Z (20.21%) said they would 'test' the platform by investing a small amount, compared to just 3% of Boomers, unknowingly exposing themselves to greater risk.
This comes as investment scams surge worldwide. In 2024 alone, Infosecurity Magazine reported that fake investment domains jumped 25% compared to the previous year, with nearly 13,000 fake investment domains detected across more than 7,000 IP addresses.
Globally, it is estimated that over US$1 trillion was stolen through scams, according to the Global Anti-Scam Alliance.
Despite these, interest in investing among younger adults continues to rise. About 30% of Gen Z started investing while still in university or early adulthood—over three times more than Gen X (9%) and five times more than Boomers (6%).
BrokerChooser also found that younger investors are more likely to be swayed by common scam tactics.
Almost one in five Gen Zs (19.96%) said screenshots of profitable trades would convince them to invest, while 15.03% would trust celebrity or influencer endorsements. See also Is Cash Out Refinancing a Smart Financial Move?
'This is concerning given that two out of three forex customers typically lose money and the fact that 50% of fraud now involves the use of AI, which can be used to fake images,' it noted.
Notably, OSC research found that people were 22% more likely to invest in AI-enhanced scams than in traditional ones.
Meanwhile, 35.37% of Millennials said they would trust testimonials from so-called 'successful traders,' even though these could be easily faked or paid endorsements to create a false sense of credibility.
One of the most common red flags, unregulated platforms claiming to be 'pending approval,' still manages to hook people. When asked how they would verify the legitimacy of a forex trading platform, 23.15% of respondents said they would ask the broker directly for copies of their licences and certificates. However, this can be risky, as it relies entirely on trusting the broker's word, who may provide forged or misleading documentation. See also Best fixed deposit rates in Singapore for Jan 2024
Krisztián Gátonyi, from BrokerChooser, said, 'It's critical that people learn to pause and verify, checking for official registration with financial regulators and scrutinising contact information.'
He noted, 'A quarter of young investors admit to making impulsive decisions in order to keep up with current investment trends, often leaving little time to properly evaluate the risks. Amid a sharp rise in investment scams, this behaviour is particularly dangerous, especially as fraudsters grow increasingly sophisticated in how they present themselves.'
'With the rise of AI, we're now seeing realistic fake websites, chatbot 'advisors', and even deepfake videos of celebrities endorsing bogus schemes. It's becoming harder for even seasoned investors to separate genuine opportunities from high-tech fraud,' he added. /TISG
Read also: Fraud and scams driven by generative AI are now among the biggest cyber threats in the financial sector
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