New BBB Research Shows Low Financial Literacy, Social Isolation Increase Scam Risk
Milwaukee, Wis. – New fraud research shows that people who live alone or have low financial literacy levels are more like to lose money to fraudsters. The research also shows that the highest engagement and victimization rates involve online purchases and social media—outpacing telephone, mail and email fraud.
The report, “Exposed to Scams: What Separates Victims from Non-Victims,” comes from the BBB Institute for Marketplace Trust, the FINRA Investor Education Foundation, and the Stamford Center on Longevity and was released in recognition of World Investor Week (September 30-October 6).
Click here for the full report on Exposed To scams: What Separates Victims from Non-Victims
During the study, researchers surveyed more than 1,000 Americans and Canadians who were targeted by scammers and reported the fraud to the Better Business Bureau via BBB Scam Tracker. Nearly half of those surveyed did not engage with the fraudster. However, nearly a quarter did, losing an average of $600.
Some key findings include:
- When phone and email were used by scammers to target consumers, relatively few consumers engaged with the scammer or lost money. However, when exposed to a scam on social media, 91 percent engaged and 53 percent lost money. Similarly, 81 percent of consumers who were exposed to a fraud via a website said they engaged and 50 percent lost money.
- Consumers were more likely to be victimized if they did not have anyone to discuss the offer with. Consequently, those who engaged scammers and lost money were less likely to be married and more likely to be widowed or divorced. Generally, those who engaged, and those who lost money, reported significantly higher feelings of loneliness. Social isolation appears to play a role in fraud victimization.
- The likelihood of victimization for this sample is greater for individuals who are under financial strain, are younger adults, or have low levels of financial literacy.
- Research showed that 51 percent of people who reported a third-party intervention were able to avoid losing money. Cashiers, bank tellers, employees of wire transfer services and other financial services companies where consumers were about to send money to a scammer, served as an important last line of defense.
- Nearly half of those surveyed said the news media was their primary source of information about scams. Word of mouth was the next best form of protection and awareness.
Prior knowledge of fraud helps decrease the chances of victimization. One-third of consumers who were targeted by a scammer, but did not engage, already knew about the specific type of scam. In addition, consumers who understood the tactics and behaviors of scammers did not engage with the fraudsters.
For more information:
For the full report, go to BBB.org/ExposedtoScams
To learn more about scams, go to BBB.org/ScamTips.
To learn how to avoid scams, go to BBB.org/AvoidScams.
To report a scam, go to www.BBB.org/ScamTracker. Your experience can help others to recognize suspicious behavior and stop scammers in their tracks.
Click HERE for an online version of this story. For more information or further inquiries, contact the Wisconsin BBB at www.bbb.org/wisconsin, 414-847-6000 or 1-800-273-1002. Consumers also can find more information about how to protect themselves from scams by following the Wisconsin BBB on Facebook, Twitter, Instagram and YouTube.
ABOUT BBB: For more than 100 years, the Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2018, people turned to BBB more than 173 million times for BBB Business Profiles on more than 5.4 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. There are local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Wisconsin which was founded in 1939 and serves the state of Wisconsin.
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
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