Teaching Your Teen to Avoid Financial Scams

Teaching Your Teen to Avoid Financial Scams

When your child becomes a teenager, they enter an exciting world of new opportunities. They get a job, start to drive, and eventually begin their adult life. Unfortunately, this freedom has its share of risks. Scammers often prey on teenagers because they’re young and have less experience with money.

By educating yourself and sharing your knowledge with your child, you can help your teen keep their money safe. Learn more about avoiding financial scams and a few quick ways to identify them.

What Are Financial Scams?

Financial scams occur when someone tries to trick you into giving them money or information through misleading or deceptive techniques. Financial scams take all shapes and forms, from identity theft to investment fraud, to phishing scams. Anyone is vulnerable to financial scams, but scammers often target the very young or old, believing they’ll be more trusting with their money.

How to Recognize a Financial Scam Targeting a Teen

If something seems too good to be true, like a 200% return on investment, it usually is. That’s the first and most obvious sign of a financial scam. Other red flags include:

  • Rock-bottom prices on something that’s typically expensive, such as an electronic device
  • A fee to enter a contest
  • A request for money to be wired
  • A request for personal information, such as a Social Security or bank account number

Talk to your child about keeping their information safe. Explain what type of data scammers might want and why they want it, such as stealing a Social Security number to apply for a credit card. You should also discuss specific scams targeting young people so that your teen keeps an eye out for these potential pitfalls.


Inexpensive Luxury Goods

What teenager doesn’t want a new smartphone or gaming system? Scammers know teens’ weaknesses all too well. Scammers might post online ads for the latest must-have luxury goods priced at a fraction of their retail price, trying to entice teens to buy them. Scammers usually use a picture that looks like the real item, but don’t actually have the item to sell.

Most often in these schemes, the scammer promises to send the luxury item in a few days, then disappears and won’t respond to calls, texts, or emails. Sometimes the scammer will send something, but it’s a cheap imitation of the real thing or an item that is completely different from what was promised. Teach your teen to avoid buying things from ads that pop up online or from websites that look questionable or have long, complicated URLs.


Every kid planning to attend college will jump at the chance to secure financial assistance for college. Unfortunately, scammers know this, and they often target high school and college students with promises of financial aid that never materialize. Educate your child about these scholarship scams.

  • Guarantees: Companies or individuals may claim to provide consulting services for scholarships, pledging to research the right fit for your student and connect them with promising scholarship offers. If someone guarantees that your child will earn a scholarship to an institution, you can dismiss their services. No one can deliver on that promise, and you’ll waste your money.
  • Application fees: Legitimate scholarship funds don’t charge fees for your application. If someone asks your child to pay to apply for a scholarship, tell them not to apply. Teens should also ignore “limited-time offers” on scholarships. Legitimate scholarships have well-publicized deadlines created months before they are due. People who peddle “limited-time offers” are just trying to trick harried students into applying quickly without researching the opportunity.
  • Unclaimed: You’ve probably seen advertisements for “unclaimed” scholarship money that supposedly is just waiting for your child. Those claims have been made for years, but they aren’t true. Most scholarship programs have more than enough applicants, and all the money gets claimed. People who say they can tap into such funds may ask for money to track down the scholarships, but it’s a scam.

Social Media Surveys

Many teens spend a lot of time on social media. They may enjoy taking the surveys that pop up in their feeds, promising an interesting payoff such as “see who viewed your profile.” To complete the survey, teens must supply personal data, such as where they were born or their siblings’ names, under the guise of a “research” project. Explain to your child how this information can be used by scammers to access their online accounts.

Surveys may also ask teens to install software on their phones or laptops that can capture personal information, which the scammer can sell. The safest approach for teens is to avoid filling out any surveys online. Remind them that if they do take one, they should alert you so you can assess the situation.

Encourage Your Child to Tell You About Any Potential Scams

Teens may feel embarrassed if they’ve been scammed and not want to tell you about it. When you talk to your child about financial scams, encourage them to speak up if they fall victim to a hoax. Their honesty can help you educate them and could save someone else from becoming the scammer’s next victim.

Learn more strategies for assisting teens and other children with their money on our WalletWorks page.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.