Why are some people more vulnerable to financial fraud?

Each year millions fall prey to fraudsters and financial scams. New research reveals which types of people are most vulnerable to being defrauded online by the bad actors.

“Some people are more susceptible to scams,” Gary Mottola (research director, Financial Industry Regulatory Authority) told CBS News’ Anthony Pura. For example, a fraud victim claimed she was contacted by an individual claiming to represent the Internal Revenue Service. The con artist demanded $500 from the victim, who was led to believe she owed the department taxes.

“They said, basically, if you don’t pay this we’re going to file a lawsuit against you for $75,000,” the victim, Jackie, whose name was changed to protect her identity, said in an interview with FINRA.

Jackie paid.

Researchers at FINRA, the Better Business Bureau and others found that people who lose money are less likely to question authority. This makes them more vulnerable to being conned.

” You don’t want the IRS to be messed with. Jackie stated that this was her view at the time.

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The study also found that scam victims sometimes fear coming off as ignorant if they ask too many questions. Scam victims also believe wealth is often found in random situations, which makes them more vulnerable to making false claims. Scam victims also believe that people who do well are often rewarded. This makes them less likely to trust others.

I don’t know how corrupt the world is,” a victim of an online investment scam said to FINRA in an interview. She admitted that she could have asked questions regarding the possibility.

” It’s then that things can become dangerous, in terms of losing your money to a financial scam,” Mottola stated. Mottola advised people to ask questions about why they are being contacted by phone or email asking them for personal or financial information. He also encouraged individuals to get advice from their family and friends.

The findings are based on a survey of 1,408 Americans and Canadians who reported a scam. Of that number, 47% didn’t engage with the criminal and so were not victimized; another 30% interacted with the fraudsters but didn’t lose money, while 23% of the respondents interacted and were ripped off, the report shows.

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