What are the new financial scams targeting children?

As scammers grow more sophisticated with the rise of AI, children are more vulnerable

Teaching children about scams early on equip them with the understanding they need to beat the crooks. Getty Images

Teaching children the basics of managing money is more important than ever, especially as financial scams evolve and children become prime targets.

With children now owning smartphones, bank accounts, and engaging in online activities such as gaming or trading, they are more exposed than before.

I will highlight three emerging scams targeting kids and explain how parents can help to protect them.

Talk about scams early

Although it might not be a pleasant conversation, teaching children about scams early on can make a big difference. If they understand that things might not always be what they seem, they will be better equipped to spot warning signs.

A crucial lesson is that “If something sounds too good to be true, it probably is”. While adults may easily recognise this, children often don’t have the experience to determine what’s “too good”.

Scammers exploit this lack of context, and their tactics are becoming more creative and persuasive. For example, children should be wary of promises like doubling their money in a short time – such offers are almost always a scam.

Three scams targeting kids

1. Money mules

A growing scam involves luring children, particularly those from wealthier backgrounds, into disclosing their bank accounts.

Scammers offer a seemingly simple task: transferring money from one account to another, with the child keeping a small portion as “payment”. For example, a scammer might send a message like this:

“Hi [Name], I’m Alex, and I have a business opportunity that can earn you quick cash. You’ll receive $1,000 in your bank account, and all you need to do is transfer $800 to another account. You can keep $200 for yourself!”

To a child, this may seem like an easy way to make money while helping someone out. However, they could unknowingly assist in laundering money or their bank details could be stolen. Worse, they could face legal consequences for being involved in such activities.

What to tell your child: Never share your bank details online, no matter how good the offer seems.

2. AI-generated articles

With artificial intelligence (AI), scammers can now create highly convincing fake news articles. These articles may feature celebrities or influencers endorsing bogus investment platforms.

For example, a recent fraudulent article claimed that a fictional character named Charlotte Walsh was earning $85,000 a month through a trading platform. It even included fake screenshots of Charlotte on a popular UK morning TV show to make the scam more believable.

Children, more trusting by nature, might easily fall for such tricks, especially if they think others, including celebrities, are getting rich quickly.

The scam then prompts the child to transfer money to “sign up” for a trading account, only for the scammers to vanish with their money.

What to tell your child: Always verify the legitimacy of a website or article. If everyone is suddenly getting rich, it's almost certainly a scam.

3. Online game currency

Many children are passionate about online gaming, and scammers know it. A common tactic is to lure children with promises of free in-game currency (like Fortnite's V-Bucks) in exchange for completing a task – downloading an app or filling out a survey.

These offers may seem harmless at first, but clicking on fake links can result in malware being installed on their device, or worse, personal information being stolen.

For example, a scam might say: “Hey, Fortnite Fan! Want FREE V-Bucks? Complete our survey and download our app to get V-Bucks instantly!”

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While it might seem like a great deal, kids can lose far more than they gain. In the worst cases, they might make payments they’ll never get back.

What to tell your child: Never trust offers of free in-game currency from outside the official game platform. Always stick to trusted sources.

How to protect our kids

As scammers grow more sophisticated, particularly with the rise of AI, our children are at greater risk. That’s why having conversations about scams is crucial.

By staying informed and maintaining open communication, we can help safeguard our children from falling victim to these increasingly clever deceits.

Remember, teaching kids to manage money isn't just about making it – it's also about keeping it safe.

Will Rainey is the founder of Blue Tree Savings, a company that helps parents teach their kids about money