
Scams that abuse consumers’ trust in brands are among the most successful forms of fraud and are becoming more common. According to data from the Federal Trade Commission (FTC), U.S. consumers lost $752 million to business impostors in 2023, up from $438 million in 2021. The FTC found that online shopping fraud was the second most common scam reported by consumers in 2023, after impostor scams.
Although impostor scams affect all consumers, a recent consumer attitudes survey by ClearSale revealed that various age groups are most vulnerable to different scams, and consumers typically hold the real brand responsible. In fact, 79% of respondents said they would stop purchasing from a site after experiencing fraud. According to data from the FTC Consumer Sentinel Network, the most common brand impersonation tactics differ by generation. Understanding how each age group is targeted can help retailers protect their key customer segments and their brand reputation.
Baby Boomers
Individuals who are 55 and up account for 45% of consumer spending, but according to the consumer attitudes survey, only 18% of U.S. consumers in this group shopped on social media in the past 12 months. In turn, this age group also reported the lowest rate of social commerce fraud at just 5% during the survey period.
On the other hand, these consumers are more comfortable talking on the phone than other age groups, and fraudsters exploit this preference. ClearSale’s survey found that 42% of online shoppers in this age group prefer to call customer support instead of using the live chat function when they need help. Consumers searching online for assistance from airlines, retail marketplaces and other companies risk finding an impostor’s number in search results or advertisements. In addition, not all imposters wait for consumers to make calls—some pose as trusted retailers and banks, call people and pressure them into sharing credentials and payment data. The median loss per phone scam victim in 2023 was $1,480.
The following tips can help organizations protect their relationships with baby boomer customers:
- Use automated AI tools to monitor web search results and ads to help uncover impostors posing as your customer service center and report fakes.
- Create messaging campaigns to remind your customers that your brand will never call them to request payment data or login credentials.
- Report phone scams using your brand to the Federal Trade Commission.
- Make sure your customer support number is prominent across all your commerce channels.
Gen X and Millennials
Gen X and millennial consumers—those born between 1965 to 1980 and 1981 to 1996, respectively—exhibit similar shopping and fraud experience patterns. According to the consumer attitudes survey, 49% of Gen X and millennial online shoppers made purchases on social media, and 13% experienced social commerce fraud in the past 12 months. In 2023, these consumers were most likely to get scammed on social platforms, and they were most commonly deceived into handing over credit card data.
Because of their experiences with credit card fraud, Gen X and millennial social media shoppers are more familiar with digital wallets and alternative payment methods than their older counterparts. In fact, 70% of these consumers said alternative payment options make them feel more secure when buying online, and 73% said the same about security certificates on ecommerce sites.
To maintain a positive relationship with Gen X and millennial customers, organizations should:
- Continuously monitor social platforms with automated AI tools to help identify fake accounts, posts and ads so you can report them for takedown before they capture your customers.
- Implement social campaigns that educate your audience about your authentic social media handles and websites to help counter impostors’ misinformation.
- Provide alternative payment options and display your store’s security badges on your site.
Gen Z
Like Gen X and millennials, Gen Z consumers (those born between 1997 and 2012) are most likely to be deceived by social media fraud, in part because they spend the most time on social platforms and thus have more opportunities to interact with fake accounts. According to the consumer attitudes survey, 52% of Gen Z consumers shopped on social media in the past 12 months, and 15% experienced social commerce fraud during that time. Further, the FTC data showed that Gen Z is most likely to lose money through payment apps rather than credit cards.
Due to their cost-conscious nature and desire for luxury goods, many Gen Z shoppers seek out product “dupes,” such as fast-fashion imitations of new designer looks. However, the quest for a good deal can sometimes lead these consumers to unwittingly buy counterfeit goods, the production of which may enable human rights abuses and organized crime. When the bogus goods disappoint consumers or if the counterfeit sellers also steal their payment data, shoppers may associate the real brand with the negative experience.
Brands should consider the following steps to protect their relationship with Gen Z shoppers:
- Display security certificates and security badges on your website. Since 71% of consumer attitudes survey participants aged 18 to 24 said they feel more secure buying from sites that do so, it can make those shoppers feel more comfortable.
- Monitor social platforms and the web for imposter accounts and websites to reduce the risk of your customers encountering fraudsters.
- Implement messaging campaigns about authentic sales channels and products to help guide shoppers to safe sites.
- Rigorously monitor social media, ecommerce marketplaces and the internet for counterfeits. Any counterfeit products you discover should be documented and reported to the FBI and the platform or site host. If counterfeits are a major issue, you may want to create a messaging campaign to educate your customers about differences in quality, legitimacy and social impact between your products and fakes.
No matter how fraudsters connect with your customers, it is important to monitor and report brand impersonators and inform your customers about your safety practices and ways to ensure they connect with your authentic brand. To be most effective in this effort, it is essential to do so in ways that are tailored to consumers’ shopping and security preferences. These steps can help you maintain your relationships with current customers and establish a reputation that appeals to new shoppers of any age bracket.