New BBB Study Investigates What Separates Victims from Non-Victims
Columbus, OH (September 30, 2019) – A new report from the Better Business Bureau Institute for Marketplace Trust, the FINRA Investor Education Foundation, and the Stamford Center on Longevity, was released in recognition of World Investor Week (September 30-October 6). The study, titled “Exposed to Scams: What Separates Victims from Non-Victims,” explores why some individuals are more likely to lose money to scams than others.
For the study, researchers surveyed more than 1,000 Americans and Canadians who were targeted by scammers and who had reported the fraud to the Better Business Bureau via BBB Scam Tracker. Nearly half of those surveyed did not engage with the fraudster. However, almost a quarter did, losing an average of $600.
The research found that people who live alone or have low financial literacy levels are more likely to lose money to fraudsters. The research also showed that the highest engagement and victimization rates involve online purchases and social media—outpacing telephone, mail and email fraud.
Some other key findings include:
- When phone and email were used by scammers to target consumers, fewer 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 with the scammer, 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, younger adults, or those who 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.
The research also revealed that 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.
Better Business Bureau is a community based resource, a trusted advisor, and a partner in business. BBB exist to advance Trust in business and believes that businesses who embrace Trust as a core principle in their organization will see that it leads to growth in employees, customers, community and their bottom line. Through evaluation and Accreditation, education and training, and celebrating great role models, BBB builds a community of like-minded businesses and loyal customers. BBB believes in the power of trust to grow people, businesses and communities. It’s why they were founded in 1912 and what motivates them today.