Gone are the days of the piggy bank! Today, teenagers can manage their finances with the use of prepaid debit cards through prepaid debit card accounts. Parents can register for prepaid debit card accounts through banks and fintech companies such as Chase Bank, Bluebird, BusyKid, Greenlight and GoHenry to provide the cards to their kids. Prepaid debit cards for teens offer many unique benefits for both parents and their teens that you cannot get with cash, gift cards or standard debit cards.
The Unique Benefits:
Convenience: You can load money directly onto a teen’s prepaid debit card from the convenience of having access to a bank account online or an app on a mobile phone. This eliminates trips to the bank for purposes of withdrawing allowance money to pay teenagers. Also, like a standard debit card, prepaid debit cards can be used anywhere Visa or Mastercard are accepted. Having a prepaid debit card account provides teens with the freedom to conduct online purchases without asking their parents to make purchases for them. You can choose to have a physical card or a virtual card that can be stored in a mobile wallet.
Parental controls: Prepaid debit card programs for teens allow parents to monitor their teenager’s spending, set limits and freeze purchasing.
Emergency funds: Prepaid cards are excellent resources for teenagers to have in emergencies when they do not have physical cash available.
With so many great and unique benefits of prepaid debit card accounts for teens, unfortunately, scam artists that target them abound, particularly in a teenager’s favorite habitat—the internet.1 Teenagers have grown up on computers, smartphones, the internet and social media. Teens are generally more trusting than most age groups when it comes to interacting with others.2 This trusting nature can make teens vulnerable to scam artists, especially in an increasingly dangerous online world. According to the Federal Bureau of Investigation (FBI), people aged 19 and younger reported 14,919 scam incidents in 2021, which resulted in a total loss of $101.4 million to the teens that reported them.3
Common Online Scams That Target Teenagers
Social Media Scams
Social media is prime territory for online scams that target teens.4 Scams common to social media involve identity theft, surveys or contests that request personal information and catfishing—in which the scammer poses as someone they are not with the intention of taking money, personal information or more.
Online Shopping Scams
Teens often shop online. During online shopping scams, teens are often lured into phony websites that take their money. Also, many scams take the form of ads and online offers, promising luxury goods for amazingly low prices. However, after purchasing, the goods never arrive. They are also lured into providing personal information and are sometimes tricked into clicking on links and downloading malware.
Identity theft is one of the most prevalent scams.5 It largely appears in social media, but it appears in other areas, including websites, email, messaging apps and pop-up windows. Unsuspecting teens often make it easier for thieves to phish for information, as teens often do not realize that the personal data they are handing over can be used for identity theft.
Auction scams target unsuspecting teens in various ways. But typically, the scam involves a teen winning an auction for an item that does not exist or never arrives despite the teen paying for it.
With nearly all teens having access to cellphones, scammers have flocked to the space with confusing offers of “free” ringtones, wallpaper images and “free” services for smartphones. Teens often enter personal information along with their prepaid debit card account number and unknowingly have subscribed to a service with monthly fees that become increasingly expensive over time.
Why Do Scammers Target Teens Online?
Scam artists are motivated by money: Scammers look for the easiest possible ways to do the following: Hack into an online bank or financial institution (FI) accounts to drain funds or obtain legitimate online credentials (i.e., usernames and passwords) for resale on the dark web to other scammers. Scam artists often target teens online in identity theft scams where criminals steal personal information and create fake identities with the information taken. Teenagers are extremely comfortable being online and public about their lives. This makes them especially trusting when they are on the internet, particularly while visiting social media platforms.
For scammers, social media offers a landscape to easily manufacture a fake persona. In addition, scammers can hack into existing profiles to add “friends” to the account to later use for conning. Also, scam artists can use advertiser tools on social media platforms to target teenagers with fraudulent or fake advertisements catered to their personal details such as their age, interests or past purchases.
The importance of protecting personal data and checking teens’ privacy settings on their social media accounts should be reinforced to teenagers
Seeking parents’ information: Criminals have also found that teenagers’ online activities while using their prepaid debit cards can lead them to their parent’s personal information, such as their names, addresses, phone numbers, credit card information and Social Security numbers.6 Teenagers’ personal information (and access to their parents’ devices and personal information) makes them valuable targets for criminals. Scammers will target payment information where possible, which oftentimes includes parents’ personal information. Typically, the end goal of scamming is using the information to make fraudulent purchases or sell the information on the dark web.7
Tips to Equip Teens Against Online Scams
The importance of protecting personal data and checking teens’ privacy settings on their social media accounts should be reinforced to teenagers. Most social media platforms will allow users to control their privacy by choosing who can see their content. Once the privacy settings are in place, it is still important to remind teens to think carefully before sharing too much information. It is also important to encourage teens to be more critical of the advertisements they see online. If the option is available, teens should opt-out of targeted advertising on social media. Ads will often look genuine, which may encourage them to visit these websites to make a purchase. It is safer to visit a site directly than rely on a link in an advertisement.
Teens also should be informed to beware of money transfer requests from anyone that they do not know. Not only can their personal and financial information be compromised, but their parents’ personal and financial information is also vulnerable.
If you become aware of something that looks suspicious online, then it is important to act. You can report scams to the police or The Internet Crime Complaint Center,8 a division of the FBI. The Internet Crime Complaint Center provides victims of online scams with a reporting mechanism that alerts authorities of suspected crimes conducted on the internet.
Prepaid debit card accounts for teens make it easier for parents to disburse allowance money or simply give a few extra dollars to their children. The funds are loaded by electronic transfer from the parent’s bank account, which saves parents from taking trips to the bank to make cash withdrawals. Teens spend a significant amount of time on the internet, and a prepaid debit card provides them with the convenience of making online purchases. However, as prepaid debit card accounts for teens are becoming increasingly common, teens are becoming increasingly vulnerable to online attacks. The use of prepaid debit cards by teens is extremely attractive to scam artists online as there is the potential for not only gaining access to the teenager’s personal information but also to the parent’s personal and financial information. Parents should consider and open prepaid debit card accounts with FIs that have protective measures that monitor transactional fraud patterns in prepaid debit card accounts.
Mavis Bennett, CAMS, AVP assistant BSA officer and transaction monitoring manager, Community Federal Savings Bank, NY, USA
- Janet Fowler, “10 Common Scams Targeted at Teens,” Investopedia, September 7, 2022, https://www.investopedia.com/financial-edge/1012/common-scams-targeted-at-teens.aspx
- “How Scammers Target Kids Online,”Onpoint Community Credit Union, https://www.onpointcu.com/blog/how-scammers-target-kids-online/
- The Internet Crime Complaint Center, Federal Bureau of Investigation, https://www.ic3.gov