‘Financial sextortion’ of kids is escalating. What parents can do

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“Financial sextortion,” a form of cybercrime targeting teens and tweens, is on the rise.

Reports of financially motivated sextortion involving minors increased by at least 20% from October 2022 to March 2023 compared to the same six-month period last year, the FBI said in January.

“Sextortion is a rapidly escalating threat,” FBI Director Christopher Wray told the Senate Judiciary Committee in December. “Far too many teenagers have been victimized and they don’t know where to turn.”

Criminals force children – typically men ages 14 to 17 – to create and send sexually explicit material such as photos and videos, often by pretending to “seduce young girls,” according to the FBI.

Predators then blackmail victims and threaten to share this content with friends, family, and social media followers unless they receive payment, such as money or gift cards. Even when they get paid, scammers often demand more and escalate their threats, the FBI said.

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The damage isn't just financial: Some victims felt embarrassed, scared and isolated and resorted to self-harm and suicide, the agency said.

According to the Network Contagion Research Institute, financial sextortion is the fastest growing crime against children in North America and Australia. Incidents in these regions have increased by 1,000% in the last 18 months, it said.

The data is almost certainly an underestimate because it is based on reported incidents, experts said.

Criminals primarily target children on social media

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In the past, predators used sextortion largely for their “sexual gratification and control,” but today their motives are primarily greed, the FBI said.

Almost all of the activity is linked to a West African cybercriminal gang, the Yahoo Boys, which primarily targets English-speaking minors and young adults on social media platforms such as Instagram, Snapchat and Wizz, according to the NCRI.

“This disturbing growth in child sexual exploitation is being driven by one thing: changes in technology,” said Sen. Dick Durbin, D-Ill. and chairman of the Senate Judiciary Committee on Wednesday at a hearing with executives from social media companies, including Meta. Snap, TikTok, Discord and X.

At this point, 65% of Generation Z in six countries, including the United States, said they or their friends had been victims of online sextortion programs, according to a recent study by Snap.

In such cases, predators obtained sensitive material through “catfishing” – convincing victims to send photos by pretending to be someone they were not – or through “hacking” – gaining unauthorized access to electronic devices or “Procured social media accounts to steal images,” Snap said.

Wealthy households may be at greater risk

Children from wealthy households — those with annual incomes of $150,000 or more — are most likely to be victims of cyber extortion and cyber bullying, according to a recent study by Javelin Strategy & Research, a consulting firm.

For example, 37% of higher-income households have blackmailed children, compared to just 5% of those making less than $50,000 a year and 10% of those making $50,000 to $100,000 a year, Javelin found.

Wealthy parents are more likely to be lenient when it comes to using social media. According to the Javelin report, they are more likely to believe that tweens should have their own accounts, meaning that children should have accounts in their own names and with their own images, while using their own credentials to log in and manage them.

Additionally, children from high-income families may be more visible to criminals due to increased access to paid online accounts, such as online gaming and streaming services, the report added.

Criminals also know they are more likely to get a larger payout from wealthier people, said Tracy Kitten, director of fraud and security at Javelin. They may also have more digital devices, such as smartphones and gaming systems, and a larger digital footprint, she said.

More broadly, during the Covid-19 pandemic, there has been a surge in the number of children having access to their parents' financial accounts, perhaps to pay for home grocery deliveries, for example, giving them a way to pay predators, Kitten said.

Teens may also have peer-to-peer payment apps like Venmo or Cash App, or have access to a bank debit card, for example, she added.

This disturbing growth in child sexual exploitation is being driven by one thing: changes in technology.

Senator Dick Durbin

D-Ill., chairman of the Senate Judiciary Committee

It is unclear how much the average sextortion victim loses or how much victims lost overall. An FBI spokesman did not respond to CNBC's request for comment.

However, a recent example suggests big profits for criminals. In November, the U.S. indicted a Nigerian citizen, Olamide Oladosu Shanu, and four co-conspirators in the “largest known financial sextortion operation to date,” alleging that Shanu's company received more than $2.5 million in Bitcoin from victim payments, the NCRI said -Report .

Crime rings are distributing educational videos and scripts about the scams on TikTok, YouTube and Scribd, leading to a rise in sextortion, the NCRI said.

How to protect your children from sextortion

According to privacy experts and law enforcement, parents can take steps to protect their children from financial sextortion:

Do not assume it your Child is safe. The FBI has interviewed victims as young as eight years old and from all ethnic and socioeconomic groups, the agency said. “The victims include honor students, children of teachers, student-athletes, etc.,” the agency said. “The only common feature is internet access.”

Be aware that social media, gaming and other digital platforms carry risks. According to the FBI, sextortion can begin on any website, app, messaging platform or game where people meet and communicate.

“Parents should closely monitor their child’s phone/online usage and pay close attention to who they communicate or play with, regardless of the platform their child uses for online access,” says Chris Hill, NCRI board member and chair of the Police Athletic League, a nonprofit youth development group, wrote in an email.

Review internet and social media usage and settings. Carers can restrict internet usage or Spot checking of apps and communications on digital devices, the FBI said. You may also consider rules against using devices in bedrooms or taking measures such as turning off internet access at night. Checking social media security settings and keeping accounts private instead of public can also reduce risk.

Communicate. Open lines of communication and information sharing between parents and children are the “best defense,” the FBI said. Children need to know that such crimes happen, the agency said. Explain that any photo or video has the potential to become public. Above all, let your children know that they can always ask you for help. The FBI has additional tips for caregivers to talk to children about sextortion.

“Parents should have a conversation with their child(ren) to make it clear to them that there is nothing they cannot come to them with and that they are always open to difficult or uncomfortable conversations,” Hill wrote.

Invest in identity protection services for the whole family. Such digital services as NortonLifeLock, Aura and Identity Guard generally monitor activity on social media and the dark web, looking for cases in which a child's personal information or likeness has been compromised, for example, Kitten said.

Sign up for notifications about a child's transactions from financial accounts or peer-to-peer services for signs of suspicious activity, Kitten said.

Pay attention to behaviorlike withdrawal or depression, that's unusual, Kitten said.

Be aware of your own habits. Parents' social media behavior — for example, oversharing and posting too much personal information — can be “poor role models” for children, Javelin wrote. Public posts that openly report on vacations, school trips and birthdays, for example, also create roadmaps for cybercriminals, the Javelin report says.

Contact law enforcement immediately when he learned of unwanted inappropriate contact, Hill said. Parents can call 1-800-CALL-FBI or visit Tips.fbi.gov to report incidents. If sexually explicit images have been shared, visit the National Center for Missing and Exploited Children's Take it Down tool or Is Your Content Out There? for possible removal, the FBI said.

Correction: This story has been updated to reflect comments from Chris Hill, an NCRI board member and president of the Police Athletic League, a nonprofit youth development group.

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