Financial Fraud and Fraud Susceptibility in the United States: Research Report from a 2012 National Survey

Authors: FINRA Investor Education Foundation

Year: 2013

Focus Area: Fraud Surveys, Victim Profiling, Financial Literacy

Relevance: This study contributes to a deeper understanding of financial fraud by gauging exposure and response to traditional and Internet-based scams, and the relationships between susceptibility to fraud and various demographics.


This research report presents finding from a 2012 national survey  prepared for the FINRA Investor Education Foundation by Applied Research & Consulting, LLC.

Key findings include:

  • The ubiquity of fraud solicitations coupled with the inability of many people to recognize the red flags of fraud place a large number of Americans at risk of losing money to scams.
    • More than 8 in 10 respondents were solicited to participate in a potentially fraudulent offer, and 11% of respondents lost a significant amount of money after participating in such offers.
  • Americans 65 and older are more likely to be targeted by fraudsters and more likely to lose money once targeted.
    • Older respondents were 34% more likely to have lost money than respondents in their 40s.
  • The inability of researchers and policy makers to get an accurate measure of financial fraud constrains our understanding of the problem.
    • Although 11% of respondents lost money in  likely fraudulent activity, only 4% admitted to being a victim of fraud when asked directly—an estimated under-reporting rate of over 60%.

First Paragraph: Fraud researchers typically find that a very small percentage of survey respondents self-report that they have been victims of financial fraud. This phenomenon is hard to reconcile with the volume of fraud seen by regulators and law enforcement agencies. This study was designed to identify and measure the potential under-reporting of financial fraud through an innovative combination of direct and indirect questioning, assess the size of the population that is exposed to fraudulent offers, and examine demographic, psychographic and behavior characteristics associated with fraud—or what is sometimes referred to as “fraud susceptibility.”

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