Consumers reported losing more than $3.4 billion to fraud in 2020, according to a fraud database. However, since the vast majority of frauds aren’t reported, the amount lost is likely much higher.
Fraud reports have skyrocketed during the pandemic, with technology allowing scammers to cast wider nets to snare unsuspecting victims, according to an AARP study.
The report, “A Moment’s Notice,” describes the environmental and emotional factors that are present in almost all successful attempts to defraud consumers.
“Consumer advocates have long struggled to identify exactly who is most likely to become a fraud victim,” said AARP Washington State Director Doug Shadel.
Scam artists are master manipulators of emotion, and anyone can experience a scam, regardless of age, income, or education, Shadel said.
The study identifies three risk factors that can create vulnerable moments in which people may be more susceptible to criminal tactics:
- Emotion: Victims of fraud reported more and stronger emotions than non-victims at the time of fraud encounters. And more victims than non-victims reported feeling out of control during encounters with scams, which is the goal of the criminal.
- Environment: Changes such as loss of a job or death of a family member can impact a person’s response to fraud. Stressful life events can lower defenses, which may make it more difficult to spot a scam.
- Exposure: More victims than non-victims experienced multiple exposures to fraud. They also reported being more open to solicitations from strangers and making more remote purchases than non-victims, which may cause additional fraud exposure.
“The scammer’s goal is to target those vulnerable moments and to get their target into a heightened emotional state so that they are easier to persuade and control,” he said.
When emotions take over, people become more susceptible to fraud, Shadel said. “But if we pay special attention and take extra precautions during those moments in our lives, we can gain the upper hand in recognizing and avoiding scammers’ attempts.”
Four areas that can limit the likelihood of a scam’s success Include:
- Fraud prevention education that includes the role of emotion and stress: Increase fraud education efforts by including information that addresses how heightened emotions can weaken defenses to scams.
- Protective factors that can limit exposure to scams: Encourage the wider use of protective services such as call blocking, credit freezes, protective software, online monitoring of accounts, and password management.
- Social network support: Strengthen networks. Lack of social and family support may play a role in fraud victimization. Victims reported more experiences of loneliness and less social and family support than non-victims.
- More information about who are the victims of fraud. Be aware no one demographic characteristic is the primary source of fraud susceptibility. Fraud can happen to anyone.