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.
4. Living in Florida
Florida is the top state for consumer fraud complaints, with about 1,000 complaints per 100,000 residents, according to a report at 24/7 Wall St. that’s based on 2014 Federal Trade Commission data.
Florida’s dubious distinction may be because of its larger population of seniors, who are frequent targets of fraudsters. Other states with high rates of fraud include: Texas, New Jersey, Arizona, California, Maryland, Delaware, Michigan, Nevada and Georgia.
A 2014 report by AARP, “Caught in the Scammers’ Net,” says that 66 percent of scam victims say that they “often or sometimes feel isolated.”
Dating sites are prime territory for fraud — and people who are lonely are especially susceptible, says an AARP article on such scams. Emotional vulnerability and a lack of transparency in internet dating can combine to convince people that their prayers have been answered, even when a “dream partner” met online is too good to be true.
The article tells how Enitan, the name given to a former scammer interviewed for the article, worked:
Using stolen credit card numbers, the scammer would flood dating sites with fake profiles. Victims can be found anywhere — scammers also forage for connections on social media — but dating services provide the most fertile territory. Profile photos are pirated from social media or other dating sites. To snare women, he’d pose as older men, financially secure and often in the military or in engineering professions. For male victims, he just needed a photo of an alluring younger woman: “Guys are easier to convince — they’re a bit desperate for beautiful girls.” The common thread between them: loneliness. All his victims, Enitan says, described themselves as divorced or widowed. “The lonely heart is a vulnerable heart.”
Want to learn more about online dating scams, and how to protect yourself? Read: “Is Your Online Love Interest Putting Your Money at Risk?”
6. On the internet
Many people link the idea of telemarketers with fraud, and for good reason: People who listen to telemarketers’ calls are more likely to get hooked, DeLiema says.
And the digital age has produced a far bigger pipeline for fraudsters to contact potential victims: Through email, fraudulent online ads, online shopping scams and more.
Heimdal Security, which provides cybersecurity services and intel, offers a guide to the most common online scams and ways to spot them before you lose anything.
7. Part of an identifiable group
The Securities and Exchange Commission warns that some scams “prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups.” How it works, according to a consumer report from the federal agency:
The fraudsters who promote affinity scams frequently are — or pretend to be — members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster’s ruse.
In other words, scammers may seem like people you know, or someone who seems to be like you, including family.
Among the cases of affinity fraud that are cited in the SEC report are African-Americans, Armenian-Americans, retirees and Jehovah’s Witnesses.
8. In debt
Being in debt makes you vulnerable to scam artists who prey on people looking for a way out of a difficult situation. Scam artists can be hard to identify because they pose as legitimate businesses. Be particularly wary of businesses offering debt consolidation and help negotiating with creditors. Scammers also often insert themselves into the businesses of mortgage refinancing and foreclosure counseling.
People in desperate situations grasp at straws. Con artists know this and show up looking for immigrants who need help with their legal status, for example, or for victims of natural disasters who are willing to pay for help filing a claim, finding a new home or getting home repairs. One rule of thumb: Never engage a contractor who shows up uninvited to your home.
In the end, most of us are a bit vulnerable, in one way or another. Scams are so prevalent today that almost anyone can get stung. A few of the AARP report’s list of traits shared by vulnerable scam victims:
- Job loss
- Ignorance of bank procedures
- Downloading apps
- Clicking on online pop-ups
How to protect yourself
Here are more ways to arm yourself against fraud:
- AARP’s Fraud Watch Network is a good resource for people of all ages to learn about new scams and find out how to spot them and to stay safe.
- The Fraud Watch state map links to law enforcement alerts and notices about scams in your area.
- Report fraud to the AARP Foundation Fraud Watch Helpline: 877-908-3360.
- Trust your gut: Back away and take time to think when you feel pressure to buy or invest, or even just simply if your internal alarm goes off and you don’t know why. Offering something “only for a limited time” is often a tip-off to a con.
What scams have you avoided or fallen prey to? Share with us in comments below or on our Facebook page.