Researchers are coming to new conclusions as they dig into the question of what makes some people and not others fall victim to fraud and online scams.
Some 30 million Americans are sucked into some type of financial fraud each year, says the American Psychological Association. That fraud comes in all shapes and sizes, from identity theft to online dating scams, miracle cures, fake debt-collection, fake work-at-home schemes, phony vacation rentals that leave travelers in the lurch and fraudulent investment schemes that drain clients of their savings.
Victims are often not who you might expect. They include older people, yes, but also younger ones. Educated and less educated. White-collar and blue-collar. Dumb people and smart ones. Martha Deevy, a financial expert at the Stanford Center on Longevity, told the APA:
“I think the idea that there is either one profile of the victim or one solution to preventing fraud from being perpetrated needs to sort of go out the window. There are different kinds of victims for different kinds of fraud activity.”
But researchers for various groups and consumer protection organizations have been able to tease out some patterns in the types of people who become fraud victims:
1. White men
The typical victim of investment fraud is a man. He’s middle-aged, educated, financially literate and white, and he’s under financial pressure. That’s according to psychologist Laura Carstensen, founding director of the Stanford Center on Longevity, speaking to the APA.
This makes sense, when you think about it. People who don’t ordinarily buy investments aren’t likely to fall for an investment scheme, or even to be offered one.
“Fraud victimization is really associated with exposure,” said Marti DeLiema, postdoctoral research assistant at the Stanford center, in a 2015 interview with Money Talks News. “The more you engage in the marketplace, the more likely you are to be vulnerable. You have to be in the market for a product to get hooked.”
If you believe seniors are more likely to be targeted by scammers, you’re right. Elders do get hit hard by scammers and are more likely to lose a significant amount of money to fraud, but generally that’s largely because scammers pick on them more. And recent research shows that they are not as vulnerable as once thought.
“We have found that older adults are disproportionately targeted, but once they are targeted they are not more likely to be victims,” says DeLiema. “Most PSAs (public service announcements) are targeted at the elderly. Perhaps those messages are working, and maybe experience can outweigh cognitive decline.
If you’re concerned about elders who may be targeted, check out: “2 Services That Protect Grandma From Money Stealing Scams.”
Contrary to conventional wisdom, younger adults may be more at risk to fraud than older people, according to Better Business Bureau research, covered by this report in Forbes:
BBB Institute [for Marketplace Trust] … surveyed 2,021 adults, asking whether they’d lost money to a scam in the previous year. Roughly 30 percent of those age 25 to 34 were scam victims, while less than 10 percent of those 55 and older were.
The article goes on to say:
All this time, boomers have been focusing on protecting their parents and themselves against scams. But it looks like we need to work harder keeping our Millennial kids safe.
Scam artists alter their tactics depending on the unique vulnerability of their targets, says DeLiema. A young woman might not fall for a “grandparents scam” (in which con artists pose as a grandchild in trouble), but she might fall for a weight-loss scheme or an anti-aging cream because she feels insecure about aging.