Correlates of Compliance:

Examining Consumer Fraud Risk Factors by Scam Type

Marguerite DeLiema, Ph.D. (corresponding author)

University of Minnesota, School of Social Work
1404 Gortner Ave.
Saint Paul, MN 55108
mdeliema@umn.edu
ORCID: https://orcid.org/0000-0002-9807-5910

Yiting Li, M.A.

University of Minnesota, Department of Family Social Sciences
1985 Buford Ave.
St Paul, MN 55108
lixx3514@umn.edu
ORCID: https://orcid.org/0000-0002-0384-0879

Gary Mottola, Ph.D.

FINRA Investor Education Foundation
1735 K Street NW
Washington, DC 20006
gary.mottola@finra.org
ORCID: https://orcid.org/0000-0003-2963-5950

Funding:

This study was funded by the FINRA Investor Education Foundation.

Acknowledgments

The authors recognize the FINRA Investor Education Foundation for sponsoring this project, as
well as Melissa Trumpower, Rubens Pessanha, Craig Honik and Emma Fletcher for
collaborating on the survey design and data collection. We are grateful to the Better Business
Bureau’s Institute for Marketplace Trust for providing access to consumers who reported a scam
to BBB Scam Tracker. Thank you to the American and Canadian consumers who responded to
the survey and provided details about their experience. We sincerely appreciate their
commitment to raising awareness and protecting fellow consumers against scams.

Electronic copy available at: https://ssrn.com/abstract=3793757

 Abstract

Consumer fraud reports in the United States have increased each year along with median

losses. Using survey data from 1,175 American and Canadian consumers who reported a scam to

a North American consumer complaint organization, this study examines the correlates of

engaging with (i.e., responding to) and complying with three types of consumer fraud:

opportunity-based scams, threat-based scams, and consumer purchase scams. Consumers were

less likely to engage with and lose money in threat-based scam solicitations relative to

opportunity-based and consumer purchase scams. Risk factors, including household income,

loneliness, financial fragility, and financial literacy, varied across scam categories. Different risk

factors were associated with engaging in the scam than were associated with actually losing

money. Having advance knowledge of fraud prior to being targeted was protective across scam

types. Results derived from this unique data set that combined fraud reports from a consumer

complaint organization with survey responses suggest that education about specific scams is

effective at protecting against victimization. Additional research is needed on how to effectively

deliver fraud awareness messages to those who are most susceptible.

Keywords: consumer education, deception, financial fragility, financial literacy, fraud, fraud

reporting, persuasion, victimization

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Introduction

Consumer fraud is an international crime that results in billions of dollars in losses each

year. It occurs when a perpetrator “intentionally deceives a target by misrepresenting,

concealing, or omitting facts about promised goods, services, or other benefits and consequences

that are nonexistent, unnecessary, never intended to be provided, or deliberately distorted for the

purpose of monetary gain” (Beals, DeLiema, & Deevy, 2015, pg. 7). In the United States, an

estimated 15.9% consumers fell victim to a scam in 2017 (Anderson, 2019). A total of $906

million in losses were reported that year by those who submitted a fraud complaint to consumer

protection agencies (Federal Trade Commission (FTC), 2018). Reported losses more than

doubled to $1.9 billion just two years later (FTC, 2020), yet the majority of incidents are never

reported to authorities or acknowledged by victims in surveys (DeLiema, Shadel, & Pak, 2020;

Raval, 2020). Researchers have estimated that true fraud losses are between $40 and $50 billion

in the U.S. alone (Deevy & Beals, 2013).

COVID-19 has exacerbated financial scams by creating an environment ripe for fraud

(Ma & McKinnon, 2020). Scammers capitalize on economic disruption, fear, and misinformation

to deceive their targets (Balleisen, 2018). The pandemic economy has deepened financial

insecurity for many, and fear and uncertainty permeate the globe as nations struggle to control

the disease and respond to high levels of unemployment. Social distancing brought on by the

pandemic has increased loneliness for many Americans, particularly the elderly, which as prior

work suggests, may lead to increased fraud susceptibility. To safeguard those who are most

vulnerable, consumer protection agencies and advocacy organizations need guidance on where to

target protection resources.

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Using a survey of American and Canadian consumers who reported incidents of

attempted and successful fraud to a non-governmental consumer complaint organization—the

Better Business Bureau, this study examines the demographic, psychological, and contextual

factors associated with responding to a scam and losing money. We test whether risk factors

differ based on the type of scam that was reported. Frauds are categorized as either (1)

opportunity-based scams involving positive financial or social rewards, (2) threat-based scams

involving harmful threats of negative consequences, or (3) consumer purchase scams involving

fake or unnecessary products and services. The goal is to inform more targeted consumer

education to inoculate people against specific forms of fraud.

Literature Review on Fraud Risk Factors

Age

Existing literature presents a conflicting narrative of who is most susceptible to fraud.

Consumer fraud complaint data and random sample surveys typically find that young and

middle-aged adults are more likely than older adults to report fraud (Anderson, 2019; FTC

2020). However, studies that assess behaviors associated with scam susceptibility find that

susceptibility increases with age-related declines in cognitive functioning and financial decision-

making (Han et al., 2016a; 2016b). More research is needed to determine whether the

relationship between age and fraud victimization varies across scam types which may help

explain mixed findings in previous research.

Social Isolation and Loneliness

Social isolation—the extent to which a person spends their time alone—and loneliness,

an emotional state in which a person subjectively feels alone (Holt-Lunstad et al., 2015), are

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hypothesized risk factors for fraud. A recent study found that loneliness was associated with

poorer financial and healthcare decision-making, but only among subjects with low cognitive

ability (Stewart et al., 2020). Qualitative studies also suggest a link between loneliness, social

isolation, and fraud victimization (Alves & Wilson, 2008; Cross, 2016; Lee & Soberon-Ferrer,

1997). Lonely consumers may be particularly susceptible to scams that offer a chance to feel

special or important, such as lottery and sweepstakes scams, or the feeling of being loved and

needed, such as romance scams (Buchanan & Whitty, 2014). Scammers also use social isolation

as a tactic to actively manipulate targets away from trusted friends and family members who

could keep them safe (DeLiema, 2018). In the “grandparent scam” and government imposter

scams, for example, scammers instruct their targets to keep the interaction confidential to stop

them from seeking advice or a second opinion that could foil the scheme. The extent to which

loneliness and isolation increase susceptibility to different categories of scams is not known.

Emotion and Decision-Making

According to the Elaboration Likelihood Model (ELM) of persuasion (Petty &

Cacioppo, 1986), individuals process persuasive information through either a “central route” that

involves dedicating attentional resources to carefully scrutinize and cross-reference the message

with prior knowledge, or a “peripheral route” which involves using heuristic shortcuts and

reliance on basic cues to judge the legitimacy of the message. Incidental affect—sadness,

excitement, etc.—can influence whether a persuasion message is processed through the central or

peripheral route (Petty & Briñol, 2015). In decision-making tasks in the laboratory, incidental

emotions have been shown to produce peripheral thinking and poor decision outcomes. For

example, Duclos, Wan, and Jiang (2013) found that subjects who felt isolated or ostracized were

more likely to pursue risky decisions that had a higher potential payout, and Baumeister and

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colleagues (2002) showed that social exclusion produces a decline in cognitive performance. In

another study, subjects who were manipulated to feel sad were more impatient and chose to

accept an immediate payout of less money instead of waiting to receive more money in the future

(Lerner, Li, & Weber, 2013).

Many frauds incorporate powerful visceral appeals to put the target in a state of high

emotional arousal and inhibit them from carefully scrutinizing the offer or request. Some scams

use positive emotional arousal, promising the target an opportunity to make money, find

romance, or get out of debt easily. Other scams use fear to convince the target that they must pay

money in order to avoid a negative consequence, such as a computer virus, legal problems, or to

get a loved one out of serious trouble. Kircanski et al. (2018) found older adults in positive and

negative arousal states were more likely to want to purchase a product in a misleading

advertisement than older adults in a neutral emotional state. More research is needed to identify

how these emotions influence decision-making in an applied high-risk consumer context, such as

the choice to comply with a scam, and whether positive emotions—generated by the promise of

receiving something desirable—versus negative—generated by intimidation—are more likely to

result in scam compliance.

Financial Literacy

Financial literacy is a broad concept which assess one’s “ability to use knowledge and

skills to manage financial resources effectively for lifetime financial security” (Goyal & Kumar,

2020, p. 81). The consequences of poor financial literacy are serious in other financial decision-

making contexts such as saving, investing, and managing debt (Lusardi, 2012). Researchers have

proposed that poor financial literacy plays a role in fraud susceptibility as well, but findings are

mixed. Pak and Shadel (2011) found that older lottery fraud victims scored poorly on a test of

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financial literacy whereas investment fraud victims scored significantly higher than the general

U.S. population age 50 and older. Even within the category of investment scams, findings are

mixed. DeLiema et al. (2018) found that financial literacy was negatively associated with

investing with an unknown person, but positively associated with investing based on a free meal

seminar, while Kieffer and Mottola (2017) found that financial literacy was positively associated

with investment fraud victimization. More investigation is needed to determine how actual and

self-rated financial literacy relate to susceptibility across diverse categories of fraud.

Financial Fragility

Many scammers use phantom fixation—dangling the promise of rewards—to entice their

targets to comply. “Get rich quick” schemes and other scams that promise a windfall of money

or an easy way to get rid of debt may appeal specifically to those facing financial hardship.

Research is needed to determine whether the condition of being financially fragile – having little

to no access to funds to cover an unexpected emergency expense – is a risk factor for engaging

with and losing money in scams, particularly scams that involve attractive financial

opportunities.

Prior Victimization

Titus and Gover (2001) found that becoming a victim of fraud increases the risk of future

victimization. One reason is that victims’ contact information is added to “sucker” lists and then

sold to other scam artists (FTC, 2016), resulting in increased targeting. However, some victims

might become more vigilant in future consumer interactions after losing money in a scam.

Further study is needed to determine the relationship between past victimization and the

likelihood of engaging in a subsequent scam, and whether re-victimization is more common to

specific categories of fraud.

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Scam Knowledge

Of paramount interest to consumer protection agencies and consumer advocates is

whether efforts to educate and inform the public about fraud are effective. According to the

Persuasion Knowledge Model (Campbell & Kirmani, 2000; Friestad & Wright, 1994), a target’s

assessment of a sales interaction depends on his or her prior knowledge about the product or

offer, ability to recognize persuasion attempts, and beliefs about the influencer’s motives.

Knowing about a scam may stop a person from responding to a solicitation, but if they do

engage, they encounter additional persuasion tactics that make it challenging to withdraw from

the interaction. Common persuasion tactics scammers use include scarcity (the pressure to act

right away), liking (presenting oneself as kind and friendly and thus harder to refuse), and

authority (projecting legitimacy using authoritative visuals, professional testimonials, and by

pretending to be associated with a respected organization, retailer, or government entity)

(Cialdini, 2007; DeLiema, Yon, & Wilber, 2016). No studies have assessed whether consumers’

psychological responses to common persuasion tactics differ by scam type or to what extent they

influence the choice to respond to and comply with a scam.

Limitations of Prior Research

Prior research on the correlates of fraud victimization has a number of methodological

limitations. First, victim characteristics appear to differ by scam type (see Pak & Shadel, 2011),

indicating that different types of people are uniquely susceptible to specific forms of fraud.

Studies that group victims of very different scams together in statistical models (e.g., Schoepfer

& Piquero, 2009; Titus, Heinzelmann, & Boyle, 1995) can obscure victim risk factors that vary

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by fraud type. For consumer education to be effective at protecting the most vulnerable

consumers, risk factors must be analyzed separately based on the category of the scam.

Another limitation is that aside from a handful of surveys (see AARP Foundation (2003),

Financial Industry Regulatory Authority (2006), FINRA Foundation (2007), DeLiema, Pak, &

Shadel (2020)), the majority of victim profiling studies use general population samples where

survey respondents are asked to self-report fraud victimization (e.g., Anderson, 2004, 2013,

2019; FINRA, 2013; Schoepfer & Piquero, 2009; Titus, Heinzelmann, & Boyle, 1995). The

problem with this approach is that fraud is under-acknowledged and underreported in survey

research, likely due to social-desirability bias. This problem is illustrated by studies surveying

independently identified fraud victims (“known” victims) using samples provided by law

enforcement agencies or victim lists. In the Senior Fraud Risk Survey, FINRA Foundation

(2007) found that only half of 101 known victims admitted losing money after being misled or

defrauded by a broker. This finding is similar to that of DeLiema, Shadel, and Pak (2020) who

found only 48% of known investment fraud victims admitted that they invested and lost money

in a scam. Pak and Shadel (2011) found that only 36.9% of known victims age 55 and older

acknowledged fraud in a phone survey. Therefore, asking individuals to self-report fraud

victimization in a random sample survey can produce significant misclassification of victims as

non-victims.

The third limitation of prior research is that it fails to differentiate non-victims who were

targeted by a scam but did not comply from those who were never targeted in the first place. The

latter group of non-victims may share characteristics with victims but were never presented an

opportunity to engage or pay money. One survey study found that as targeting increased so did

investment fraud victimization (Kieffer et al., 2017), but overall, little is known about the role of

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targeting in financial fraud victimization. This issue, combined with under-reporting

victimization in surveys and failing to separate risk factors by scam type, limits our

understanding of who is most susceptible and how to protect them.

Study Purpose

The present study addresses these limitations by surveying 1,175 consumers who were all

targeted by scams, and of these targets, nearly a quarter lost money. These consumers reported

the incident to the Better Business Bureau (BBB). Reports were reviewed by BBB staff and

confirmed as fraud prior to being publicly posted on the BBB Scam Tracker website. This is the

first study in the U.S. to survey individuals who previously filed a fraud report with a consumer

protection organization. The advantage of surveying this population is that the study controls for

targeting—all participants were targeted—and minimizes the risk of misclassifying victims as

non-victims. Another advantage is that a range of different scams are reported, allowing risk

factors to be assessed separately by the category of scam. We identify the correlates of engaging

with and losing money across three major categories of fraud—opportunity-based, threat-based,

and consumer purchase scams, determining how risk factors vary by scam type and whether

there are consistent characteristics that offer promising opportunities for consumer protection

and education.

Methods

Survey Development & Administration

In 2017 and 2018, the FINRA Investor Education Foundation, in concert with BBB

Institute for Marketplace Trust and the Stanford Center on Longevity, sponsored and conducted a

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study to uncover the process of fraud victimization and understand the factors associated with

losing money. To inform survey development, 18 in-depth interviews were conducted with

individuals who were targeted by fraud. Half of these participants lost money and half did not.

Interviews revealed situational characteristics of the scam encounters and surfaced the personal

knowledge, beliefs, and values of the targets themselves. Interview findings were used to inform

survey items and formulate hypotheses.

The 89-item online survey was fielded in August 2018. More than 90,000 individuals

who resided in the U.S. and Canada were invited by email to participate in a 15-minute survey

seeking to understand why people are targeted for scams. All email recipients had submitted a

fraud report between 2015 and 2018 using the BBB Scam Tracker website

(BBB.org/ScamTracker), an online reporting tool for consumers to inform the BBB and the

general public about scams they experienced. A reminder email was sent one week later yielding

2,100 total responses.

Before entering the survey, participants read an online consent form and agreed to

participate. The study protocol was reviewed and approved by Sterling IRB, ID6442. No

personally identifying information was collected. Respondents who initially submitted a fraud

report to BBB Scam Tracker on behalf of someone else were discontinued because they were not

the targets of the solicitation.

Survey Items

The survey (Appendix A) began with a demographic questionnaire followed by specific

questions about the scam that was reported to BBB Scam Tracker. Respondents could select

from a dropdown list of the 12 most common reported scams or could select “other” and self-

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describe the scam they experienced. These descriptions were read and categorized by a member

of the research team, generating a new total of 27 distinct scam types (including the original 12).

Scams were divided into three categories based on the primary “story” the scammers

used to convince targets to comply with the solicitation. Opportunity-based scams (n=387) are

frauds that promise the target something positive and rewarding—lottery winnings, a prize, a

chance to earn significant money either through a job opportunity, grant, or investment; the

chance to reduce or eradicate debt; or the promise of romance/partnership. Scam types in this

category are investment, sweepstakes/lottery/prizes, employment, government grant, advance fee

loan, fake check/money order, debt consolidation, secret shopper, and sweetheart/romance

scams. Threat-based scams (n=562) are frauds in which scammers convince the target that

something bad has happened and they must pay money to avoid a negative consequence. These

frauds include bogus tax collection, government impostor, debt collection, tech support,

grandparent scam, extortion, and unnecessary home repairs. Consumer purchase scams (n=226)

involve paying for products and services that do not exist or that were intentionally

misrepresented to prospective buyers. They include online marketplace fraud, pet adoption,

health insurance enrollment, bogus charities, and other general consumer scams like billing for

non-existent subscriptions. A final group of reported scams were uncategorizable because the

respondent did not provide sufficient information for assignment or because the target was a

business and not an individual. The majority of uncategorizable scams were email or website

phishing attempts (n=200), followed by fake invoices, credit card fraud, and all scams recorded

as “other”. A total of 232 uncategorizable reports were removed from the analysis.

Survey respondents next answered scam-specific questions that included the method of

contact, whether they engaged or interacted with the scammer/solicitation (versus ended the

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interaction immediately), whether they lost money (became victims), and if so, the dollar amount

of direct losses. They were asked whether they knew about the specific scam before they were

targeted, such as from friends/family, the news, and social media, and whether they have lost

money in a previous scam.

Respondents who engaged with the scam were asked whether anyone had tried to

intervene and the extent to which they agreed with 14 items that characterize many consumer

interactions with fraud, including targets’ perceptions of the situation, their personal

circumstances at the time, and their emotions. Examples include, “I felt under time pressure,” “I

felt that I had an opportunity to get ahead financially,” “There was no one available to talk to

about the offer at the time,” and “I thought the person was nice.” Items were rated on a scale

from 1 (completely disagree) to 7 (completely agree). An exploratory factor analysis (EFA) was

conducted to examine the factor structure that emerged from these series of 14 questions and

create new variables to include in the regression analysis.

In addition to questions specific to the scam interaction, the survey included items that

measured psychological and financial characteristics that may increase the risk of scam

engagement and victimization. Loneliness was assessed using 3-items from Hughes, Waite,

Hawkley and Cacioppo (2004). Participants are asked how often they (1) lack companionship,

(2) feel left out, and (3) feel isolated from others, where 1=often; 2=some of the time; and

3=hardly ever or never. Items were reverse scored. Total loneliness was calculated by summing

responses to the three items (range 3-9).

Financial fragility is defined as a lack of liquidity to deal with an unexpected emergency

expense (Hasler, Lusardi & Oggero, 2018). Participants were asked if they would be able to

come up with $2,000 if an unexpected need arose in the next month. The item was dichotomized

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such that those who said they probably could not or certainly could not come up with $2,000

were coded as financially fragile. Financial literacy was scored by summing the number of

correct responses to five multiple choice and true/false questions that assess fundamental

personal finance concepts, including compound interest, inflation, and diversification (Lusardi,

Mitchell, & Curto, 2014). Responses ranged from 0 (none correct) to 5 (all correct). Self-rated

financial competency was measured by asking respondents to rate the extent to which they are

good at dealing with day-to-day financial matters, such as checking accounts, credit and debit

cards, and tracking expenses, on a scale of 1 (strongly disagree) to 7 (strongly agree).

Analytic Approach

Principal axis factoring with a promax rotation was used to identify relationships between

14 items that measured the consumer’s perception of the scam interaction, their feelings, beliefs,

and other situational characteristics specific to the interaction. These questions were only asked

of those who engaged (n=673). The Keiser-Meyer-Olkin (KMO) measure of sampling adequacy

(0.737) and Bartlett’s test of Sphericity (p < .001) suggest that the sample was appropriate for

EFA (Howell, 2012; Leech, Barrett, & Morgan, 2005). Items with low communalities (< .30)

and factor loadings less than 0.50 were eliminated from the final factor solution (Fabrigar et al.,

1999).

Using Mplus 8 statistical computing software, logistic regression was used to estimate the

correlates of engaging in a scam (engaging=1, N=1,175), and separately, losing money in a scam

(victim=1, N=1,150). Separate analyses were performed for each category of scam reported:

opportunity-based scams (N=387), threat-based scams (N=562), and consumer purchase scams

(N=226); in addition to models that included all respondents together. Independent variables

included sex (male=1), age (continuous), race (non-Latino White=1), education (high school or

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less (reference), some college/associate degree, bachelor’s degree or higher), annual household

income (less than or equal to $25,000 (reference), $25,001-50,000, $50,001-100,000, greater

than $100,000), loneliness (range =3-9), financially fragile (yes=1), financial literacy score

(range 0-5), self-rated financial competency (range 0-7), whether the consumer heard about the

exact scam before being targeted (yes=1), and whether they had lost money in a prior scam

(yes=1). Models including all respondents controlled for scam type, where opportunity-based

scams was used as the reference category.

In another set of models assessing risk of victimization, the sample is restricted to only

those who engaged with the scammer or scam solicitation (N=673) to determine whether

characteristics unique to the interaction drive compliance. These models included correlates

specific to the interaction and how the target felt about and interpreted the situation. Items

include the extent to which the target was “opportunity seeking” and “felt intimidated” (both

factor scores), as well the extent to which they “chose not to discuss it [the offer/threat] with

anyone,” “no one available to discuss it [the offer/threat] with,” “had little knowledge about the

offer,” “person/organization seemed official,” “person/organization seemed nice,”

“person/organization knew personal details about me,” and “someone tried to intervene.”

Responses ranged from 1 (completely disagree) to 7 (completely agree). Bivariate correlations

among all variables used in the analysis are presented in Appendix B.

Results

Demographic Characteristics

A total of 1,175 individuals were included in the current study. The majority of

participants were female (67%), 81% self-identified as white/Caucasian, and 60% were married

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or partnered. Nearly half were 60 years and older (46%). Forty-six percent reported having

obtained a bachelor’s degree or higher, 42% work for an employer, and 48% and live in a

suburban area. Threat/fear-based scams (48%) were reported more often than opportunity-based

(33%) and consumer purchase scams (19%) (see Table 1).

A total of 492 participants reported that they did not engage in the scam they reported to

BBB Scam Tracker. Participants who did not engage had slightly higher educational attainment

(43% bachelor’s or higher), were more likely to report working for an employer (43%), and

living in a suburban area (53%). Regarding the scam type, more than half of the participants who

reported threat/fear-based scams did not engage (68%) compared to minority of those who

reported opportunity-based (33%) and consumer purchase scams (19%).

Among those who engaged, 300 participants reported they were victims, meaning they

engaged and lost money. On average, victims lost $7,158.50 (Standard Deviation (SD)=

$58,435.70) per incident (median =$625.00). Those who engaged in the scams, including both

non-victims who engaged and victims who lost money, reported a higher percentage of

opportunity-based scams (44% and 37% respectively) and consumer purchase scams (22% and

31% respectively) compared to those who did not engage with the scam they reported.

Factor Analysis

Two factors emerged that explain 49% of the variance for the set of 14 items. Factor 1

was labeled as “I was seeking and opportunity” and had high loadings on the following

variables: (a) I felt that I had an opportunity to get ahead financially; (b) I felt that I had an

opportunity to make good on past mistakes; (c) I felt that it was "my time" and I deserved to be

rewarded; and (d) I worried about missing out on an opportunity. This factor explained 33% of

the variance and reliability (ɑ) was 0.78. Factor 2 was labeled “I felt intimidated” due to high

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loadings on the following items: (a) I felt afraid of being punished for something I had done; (b)

I felt under time pressure; and (c) I felt intimidated by the person I was dealing with. This factor

explained 16% of the variance with ɑ = 0.71. See Appendix C for details.

Regression Results

Engaging with scams. Table 2 presents the correlates of engaging with fraud where

engaged is regressed on demographic, social, financial, and other potential risk and protective

factors (N=1,175). Relative to opportunity-based scams, individuals were nearly 70% less likely

to engage when targeted by a threat-based scam (e.g., government imposter, tech support) (Odds

ratio (OR)=0.32; 95% Confidence Interval (95%CI)=0.24, 0.44). Loneliness was a statistically

significant risk factor for engaging in all scam types combined (Model 1; OR=1.16,

95%CI=1.06, 1.26). Loneliness was also associated with engaging specifically in opportunity-

based scams—e.g., lottery, prize, investment, debt reduction, and romance scams (Model 2;

OR=1.20, 95%CI=1.02, 1.42). Among those who reported threat-based scams, college graduates

were half as likely to engage than those with a high school education or less (Model 3; OR=0.49,

95%CI=0.27, 0.88). The only statistically significant factor for consumer purchase scams was

having heard about the exact scam before being targeted (Model 4; OR=0.37, 95%CI=0.19,

0.73), which was also significantly protective against engaging with other categories of scams.

Individuals were between 43% and 85% less likely to engage if they knew about the scam

beforehand.

Losing money in scams. Regressing the same factors on risk on victimization (Table 3)

shows that among all respondents with data on victimization (n=1,150), loneliness is a

significant risk factor (Model 1; OR=1.15, 95%CI=1.05, 1.26), as is poor financial literacy

(Model 1; OR=0.84, 95%CI=0.76, 0.94). Those who were targeted by consumer purchase scams

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were significantly more likely to lose money relative to opportunity-based scams (Model 1;

OR=2.19, 95%CI=1.48, 3.23). Respondents who were financially fragile were twice as likely to

lose money (Model 1; OR=2.01, 95%CI=1.33, 3.04) compared to those with access to $2,000 in

emergency funds. Those who knew about the specific scam before they were targeted were 75%

less likely to comply and lose money (Model 2; OR=0.25, 95%CI=0.17, 0.35).

Among those targeted by opportunity-based scams (Model 2), males were more likely to

be victims (Model 2; OR=1.88, 95%CI=1.05, 3.38). Married/partnered respondents were half as

likely to report victimization compared to those who were single, widowed, or divorced (Model

2; OR=0.46, 95%CI=0.25, 0.86). Individuals who reported a household income between $50,001

and $100,000 were more likely to comply with opportunity-based scams than those with incomes

of $25,00 or less (Model 2; OR=2.41, 95%CI=1.01, 5.78); but even controlling on income, being

financially fragile significantly increased risk of victimization by more than four times (Model 2;

OR=4.57, 95%CI=2.27, 9.20). Financial literacy was negatively associated with victimization by

opportunity-based scams (Model 2; OR=0.75, 95%CI=0.62, 0.92) and with losing money in

threat-based scams although the effect sizes are small (Model 3; OR=0.83, 95%CI=0.69, 0.99).

Despite lower financial literacy, self-rated financial competency was positively correlated with

losing money in threat-based scams in Model 3 (OR=1.32, 95%CI=1.03, 1.70).

Having prior knowledge of the exact scam was significantly protective for opportunity-

based scams (Model 2; OR=0.20, 95%CI=0.10, 0.41) and threat-based scams (Model 3;

OR=0.11, 95%CI=0.06, 0.21), but not consumer purchase scams (Model 4; OR=0.60,

95%CI=0.31, 1.16). The only significant risk factor for consumer purchase scam victimization

was greater loneliness (Model 4; OR=1.30, 95%CI=1.04, 1.62).

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Losing money among those who engaged. Table 4 reports the results of regressing

victimization on risk and protective factors among only those who engaged with the scam

(N=673). These models include measures of the respondents’ assumptions, feelings, and

interpretations of the interaction while they were engaging. In Model 1 (all scam types), being

financially fragile was significantly associated with losing money following scam engagement

(Model 1; OR=1.86, 95%CI=1.16, 3.00). Knowing about the exact scam reduced risk of

victimization by nearly 40% (Model 1; OR=0.62, 95%CI=0.40, 0.97). Respondents who were

more likely to be seeking a financial opportunity at the time they were targeted were more likely

to lose money (Model 1; OR=1.35, 95%CI=1.03, 1.77). Choosing not to discuss the offer/threat

with others significantly increased the odds of losing money (Model 1; OR=1.19, 95%CI=1.09,

1.30), as did agreeing that the scammer or offer seemed official (Model 1; OR=1.41,

95%CI=1.26, 1.58). The more the respondent agreed that the scammer seemed nice, the higher

their odds of victimization (Model 1; OR=1.14, 95%CI=1.03, 1.27).

Financial fragility was significantly associated with losing money in opportunity-based

scams following engagement (Model 2; OR=2.74, 95%CI=1.37, 5.47), but not with other scam

types. Interestingly, feeling intimidated during the interaction was a risk factor for losing money

in opportunity-based scams (Model 2; OR=1.68, 95%CI=1.08, 2.62) but not threat-based scams

that are more likely to incorporate fear tactics. Among those who engaged, higher self-rated

financial competency was a significant risk factor for victimization, but only for threat-based

scams (Model 3; OR=1.40, 95%CI=1.03, 1.92). Having heard about the exact scam prior to

being targeted was still protective even after consumers engaged in opportunity-based and threat-

based scams, but not consumer purchase scams. Agreeing that the scammer or scam offer

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seemed official was a significant risk factor for all categories of scams, increasing risk of

victimization by 34% (consumer purchase scams) to 67% (threat-based scams).

Discussion

The present study examines the correlates associated with both engaging in and losing

money across three major categories of fraud—opportunity-based, threat-based, and consumer

purchase scams. We uncovered which risk factors differ and which characteristics are common

across scam types. The study contributes to the literature in several ways. First, our findings are

not subject to underreporting bias as all participants acknowledged and reported a scam to BBB

Scam Tracker and had their entries reviewed and confirmed as scams by BBB staff. Second, this

study controls for targeting, solving a common survey limitation in which some respondents who

are classified as non-victims were never targeted to begin with. Third, we performed separate

analyses to determine the correlates unique to opportunity-based, threat-based, and consumer

purchase scams.

Likelihood of Engagement and Compliance across Scam Type

Relative to threat-based scams, consumers were significantly more likely to engage with

opportunity-based scams and were more likely to lose money following engagement. One

possible explanation is that a disproportionate number of victims of opportunity-based scams,

relative to non-victims, report these scams because it takes losing money for the consumer to

know they were deceived. Relatedly, more non-victims may choose to report targeting attempts

by threat-based scams because they felt intimidated, violated, and upset by the scammer’s

threats. These feelings may motivate them to contact a consumer protection organization despite

not losing money.

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A significant body of psychological evidence indicates that positive and negative

emotions have opposing effects on information processing. Positive emotions tend to promote

simple, Type II heuristic processing of a persuasion message whereas negative emotions tend to

facilitate more systematic scrutiny (see Griskevicius, Shiota, & Neufeld (2010)). In the context

of consumer fraud, this differential processing of persuasion messages suggests that positive

scams are more likely to result in a financial loss than negative and emotionally neutral scams.

Therefore, another possibility is that opportunity-based scams are simply more effective at

deceiving consumers because they play into desires for wealth, recognition, security, or

companionship. However, in a lab-based study that tested the impact of emotional arousal on

susceptibility to misleading advertisements, there were no differences between positive and

negative arousal (Kirkanski et al., 2018). Relative to participants in a neutral emotional state,

participants in both the positive and negative emotional states reported a greater intention to

purchase falsely advertised items, however these emotions were incidental (elicited by a

laboratory task) and not stimulated by the advertisements themselves. Future research must move

beyond laboratory studies and self-report data to determine whether opportunity-based scams are

actually more likely to result in victimization relative to other scam types and how emotions

contribute to compliance.

In the present study, we did not find that respondents who identified as seeking

opportunity during the interaction (Factor 1) were more likely to comply with opportunity-based

scams, nor did we find that respondents who felt intimidated (Factor 2) were more likely to

comply with threat-based scams. However, bivariate analyses show that victims score

significantly higher on the individual items that comprise these factors relative to non-victims

(blinded for review).

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Correlates of Engagement and Victimization by Scam Type

In addition to differences in the likelihood of compliance across the three scam types,

there are also important differences between the correlates of engagement and victimization by

scam type. For example, those who are male, unmarried, have higher household income but who

also are financially fragile were more likely to report losing money in opportunity-based scams,

but this profile did not emerge for any of the other categories. Low educational attainment was

only significant for engaging in threat-based scams and choosing not to discuss the offer with

anyone was only associated with consumer purchase scams. This variation in correlates adds to

previous literature showing that people are uniquely susceptible to different scams based on their

financial and psychological characteristics, as well as the social context. The products and

services scammers’ promise to provide and the elements of persuasion are each tailored to appeal

to certain targets more than others. For example, someone who is financially insecure may be

seeking money-making opportunities that will help improve their financial status, making them

more prone to opportunity-based frauds. Having financial troubles, however, would not

necessarily make that person more likely to believe they were in trouble with the government or

want to purchase a fake product advertised in an online marketplace.

We found relatively few correlates of consumer products fraud. It is possible that this

category is too broadly defined. It includes online marketplace scams where consumers

automatically engage with a fraudulent offer simply by viewing products online, and also scams

where the consumer is solicited by salespeople (e.g., door-to-door solar panel installation).

Another issue is that the types of fraudulent products and services vary widely—pets, medical

insurance, car repair, etc., thereby appealing to consumers from various demographic groups.

Additional covariates, such as frequency of online shopping, may help shed light on who is most

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susceptible to these scams. Further, this fraud category was the smallest of the three and the

sample sizes for the regression analyses were relatively small. The reduced power associated

with the smaller sample sizes for the consumer product fraud regressions (i.e., n=226, 219, and

171) may have resulted in a higher Type II error rate.

Distinct Risk Factors for Engagement versus Victimization within Each Scam Type

Results suggest that the risk factors for engaging in specific scams differ from the risk

factors for losing money in those scams. For example, loneliness was significantly associated

with engaging in opportunity-based scams, but not with losing money. For victimization,

loneliness was associated with complying in consumer purchase scams and threat-based scams.

It is possible that the promises scammers offer in opportunity-based scams and the ways in

which they cultivate relationships with their targets may be particularly effective at engaging

those who feel isolated, however once the consumer has made the choice to respond, loneliness

does not further increase the risk of losing money. In consumer purchase scams on the other

hand, loneliness may act to decrease attention to the red flags surrounding fake products and

services, or to decrease resistance to the appeals used in advertising. Other studies have found a

link between feeling lonely and the desire to go shopping (Kim, Kang, & Kim, 2005), and also a

link between loneliness and parasocial connections to TV home shopping hosts (Lim & Kim,

2011). This suggests that lonely consumers may be inclined to spend their money on products

and services as a mood enhancement or coping strategy. Although subjective loneliness was

significant in some models, we found that once the respondent had engaged with the scam,

having no one available to talk to about the offer did not increase the risk of victimization. In

other words, being physically alone did not increase the odds of complying, controlling for other

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factors. The survey did not ask those who chose not to engage if there was someone present who

deterred them from responding in the first place. This should be explored in future research.

Financial literacy emerged as a protective factor against losing money in opportunity- and

threat-based scam victimization among survey respondents, but was not significant for consumer

purchase scams, nor was it significant once the target engaged. Those who understand financial

concepts such as inflation and investing may be more skeptical of “get rich quick” opportunities,

but it is unclear how financial literacy increases resilience in the face of scams that use fear to

persuade the target to comply.

Correlates Common to the Three Scam Types

Despite large variation in correlates across scam categories, two factors were fairly

reliable across all scam types. Knowing about the specific scam before being targeted

significantly reduced the odds of engaging for all scam categories and the odds of victimization

for opportunity and threat-based scams in particular. This was the first study to use self-report

data to examine the impact of prior scam knowledge on susceptibility and suggests that efforts to

inform consumers about scams is highly effective.

The second consistent factor associated with victimization was “seeming official.” Once

engaged, consumers were between 34% and 67% more likely to comply with the scam for each

degree they perceived it to be more official. The use of authority is a common persuasion tactic

in marketing and advertising (see Cialdini, 2001) and is the sine qua non for scammers. Research

on phishing emails (Ferreira & Teles, 2019), deceptive annuity sales (DeLiema, Yon, & Wilber,

2016), and advance fee fraud (Chang, 2008) show that fraudulent communications mimic or

reference well known people and organizations (e.g., Publisher’s Clearinghouse, Microsoft,

Social Security Administration), use professional titles and insignias (e.g., “Special Agent”,

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“Financial Accounts Manager”), and present other indicators of legitimacy to appear trustworthy.

Our survey did not specifically ask respondents to describe what about the solicitation made it

seem official, but in the qualitative responses, consumers provided comments such as “[He]

sounded like a sheriff’s deputy and he was threatening me with immediate arrest if I didn’t

comply,” and “The phone ID had said 'Apple' and I had been having trouble with my computer.”

Implications for Consumer Protection

We found that consumer education about specific scams is remarkably effective at

protecting people, reducing vulnerability by up to 85%, yet results also suggest that different

demographic, financial, and psychosocial characteristics play a role in vulnerability to different

scams. This means there is not a one-size-fits-all victim profile for which to direct fraud

education. To be most effective, consumer education should be scam-specific and delivered to

those who have a set of characteristics that make them uniquely vulnerable to that scam. For

example, when informing people about how to detect and resist opportunity-based scams, it may

be wise to focus on individuals who are financially insecure. For threat-based scams it may be

more effective to focus on those with low education.

Given that victim profiles vary by scam type, the challenge for protection agencies and

consumer advocates is deciding which scams to prioritize in education and awareness efforts—

the scams that are the most common or the scams that result in the greatest losses? Another open

question is where to broadcast information about fraud. This study did not ask consumers who

knew about the scam before they were targeted to share where this knowledge came from, but in

general, the most common sources of fraud awareness are news stories and word of mouth

(DeLiema et al., 2019).

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Descriptive statistics revealed more demographic variations in victim profiles by scam

category than regression results. For example, threat-based scam targets were older, on average,

than targets in the other categories, although age differences in rates of engagement and

victimization were not statistically significant in the regression models. Still, altering the

message content and using different mediums to deliver fraud awareness information to older

and younger consumers based on these descriptive differences may be efficacious.

Future research should determine the specific aspects of fraud awareness education that

make it memorable and effective. As scams continue to evolve, consumers are challenged to

transfer their acquired knowledge about persuasion and other red flags to new variations of

scams. Scheibe and colleagues (2014) conducted a forewarning study where former fraud

victims were pitched a mock scam two weeks or four weeks after they received a forewarning

phone call about the same scam or an entirely different scam. Although forewarning reduced

compliance with the mock scam in both conditions, outright refusals were more frequent among

those who were forewarned about the same scam they were later pitched. This indicates that

consumers are poor at transferring general fraud knowledge to other scams, yet a report by

DeLiema et al. (2019) suggests that having knowledge about the methods of scammers in general

and having experience with scams is greater among those who did not engage with fraud relative

to those who engaged but did not comply. This descriptive data suggests that general knowledge

is also protective, but more systematic research is needed.

Efforts to delegitimize scam solicitations so that targets do not perceive them as official

are much more difficult. Scammers use a variety of tricks to make their communications seem

valid, borrowing all the marketing and persuasion tools used in the legitimate consumer

marketplace. Perhaps the only way to successfully inoculate consumers against these tricks is to

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educate people about the elements of persuasion and to encourage them to question and

interrogate all marketing claims before making a purchase or payment decision. To this end, a

recent randomized control trial found that concise, online educational interventions aimed at

educating subjects about the persuasion tactics used in fraud reduced susceptibility to investment

fraud among U.S. adults (Burke et al., 2020).

While this study examined the correlates of fraud victimization and monetary losses by

type of fraud, the field could benefit from research that examines the non-financial costs of

victimization by type of fraud. For example, do threat-based fraud victims experience more

negative psychological and/or emotional consequences than opportunity-based fraud victims?

Are stress levels and depression rates higher for threat-based fraud victims compared to

opportunity-based victims? Differences in how consumers respond might be driven by the way

society perceives victimization by fraud type. For instance, victims of opportunity fraud may be

perceived as greedy, whereas victims of consumer purchase and threat-based scams may be

perceived as naïve. Research in this vein could also examine if type of fraud is related to

recovery and reporting decisions following victimization, including financial and psychological

outcomes.

Limitations

Survey data is self-reported, cross sectional, and retrospective, limiting the conclusions

we can draw from the study. Because respondents completed the survey following the incident,

data does not allow us to determine whether certain situational factors, like loneliness and

financial fragility, precede or follow the scam. Longitudinal research is needed to separate the

predictors from the consequences of fraud.

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Second, the response rate to this voluntary survey was poor. Only 2.3% completed the

survey following sequential email solicitations from BBB. Survey respondents were slightly

older than Scam Tracker reporters on average, and median losses were $448 higher than the

median losses reported by victims in the full 2018 Scam Tracker database. (For comparison, see

BBB Scam Tracker Risk Report 2018). This suggests that higher financial losses may have

motivated individuals to respond to the survey and share additional details about the incident.

Third, survey respondents are not representative of the true universe of fraud targets and

victims. Fraud is ubiquitous and the vast majority of individuals do not file reports when they are

targeted. Victims also underreport, including those who do not recognize their experience as

fraud or who feel too ashamed to convey the details of their experience to others. Future research

may attempt to survey individuals who are listed on scammer’s lead lists to better represent those

who are targeted and deceived by fraudsters. This approach would also control on targeting but

would not rely on consumers to self-report fraud.

Last, this study included only American and Canadian consumers. Future work should

focus on consumers from different regions to identify whether there are variations in risk and

protective factors.

Conclusion

Using data from a unique survey of consumers who reported fraud to a consumer

complaint and advocacy organization, our study shows that the factors associated with engaging

with fraud differ from the factors associated with complying. Similarly, risk factors such as

socioeconomic characteristics, financial fragility, loneliness, and financial literacy vary by the

category of scam, although having advance knowledge of the exact scam prior to being targeted

is protective. Additional research is needed to better understand risk factors related to consumer

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purchase scams and how to deliver fraud education that is most effective for all subtypes. Our

findings and other research are consistent in showing that fraud is a pernicious social problem,

and that consumers would benefit from widespread consumer awareness campaigns from

government, non-profit, and private sector stakeholders.

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Table 1: Sample characteristics by victim status

All Did not Engaged Victim

Characteristics Participants engage non-victim n=300
N=1,175 n=492 n=383
Frequency (%) / mean (Standard Deviation (SD))
Scam Type
Opportunity-based scams 387 (32.9) 108 (22.0) 162 (43.8) 111 (37.0)
Threat/fear-based scams 562 (47.8) 333 (67.7) 127 (34.3) 97 (32.3)
Consumer purchase 226 (19.2) 51 (10.4) 81 (21.9) 92 (30.7)
Mean (SD) age 56.2 (14.2) 58.0 (13.2) 55.3 (14.8) 54.7 (14.6)
Sex
Female 783 (67.3) 325 (67.1) 251 (68.4) 199 (66.6)
Male 380 (32.7) 159 (32.9) 116 (31.6) 100 (33.4)
Annual household income
Less than $25,000 181 (16.8) 60 (13.6) 61 (17.9) 58 (20.3)
$25,001 - $35,000 132 (12.2) 46 (10.4) 48 (14.1) 36 (12.6)
$35,001-$50,000 203 (18.8) 77 (17.5) 59 (17.4) 63 (22)
$50,001-$75,000 206 (19.1) 95 (21.5) 57 (16.8) 54 (18.9)
$75,001-$100,000 128 (11.9) 57 (12.9) 42 (12.4) 29 (10.1)
$100,001-$125,000 90 (8.3) 49 (11.1) 23 (6.8) 17 (5.9)
$125,001-$150,000 51 (4.7) 24 (5.4) 16 (4.7) 8 (2.8)
Greater than $150,000 89 (8.2) 33 (7.5) 34 (10) 21 (7.3)
Race / Ethnicity
Non-Latino White / Caucasian 930 (80.9) 392 (81.8) 299 (81.7) 231 (78.6)
Asian / Pacific Islander 27 (2.3) 6 (1.3) 9 (2.5) 12 (4.1)
Black / African American 106 (9.2) 45 (9.4) 31 (8.5) 27 (9.2)
Hispanic / Latino 41 (3.6) 18 (3.8) 11 (3) 12 (4.1)
Other 46 (4.0) 18 (4.8) 19 (5.2) 19 (6.5)
Educational attainment
Less than high school 10 (0.9) 3 (0.6) 6 (1.6) 1 (0.3)
High school / GED 174 (14.8) 70 (14.3) 51 (13.8) 50 (16.7)
Some college / associate degree 451 (38.5) 179 (36.5) 155 (42) 113 (37.8)
4-year college or higher 537 (45.8) 239 (48.7) 157 (42.5) 135 (45.2)
Marital status
Married/partnered/cohabitating 689 (60.0) 307 (64.4) 211 (57.8) 166 (56.3)
Divorced/separated 204 (17.8) 69 (14.5) 69 (18.9) 64 (21.7)
Widowed 77 (6.7) 34 (7.1) 24 (6.6) 19 (6.4)
Single (never married) 179 (15.6) 67 (14) 61 (16.7) 46 (15.6)
Residential location
Urban 332 (28.4) 127 (25.9) 102 (27.8) 100 (33.7)
Suburban 556 (47.6) 262 (53.4) 172 (46.9) 113 (38)
Rural 280 (24) 102 (20.8) 93 (25.3) 84 (28.3)
Loneliness score (range 3-9) 4.2 (1.7) 3.9 (1.5) 4.2 (1.6) 4.5 (1.9)
Financially fragile 238 (25.73) 71 (18.6) 66 (21.6) 92 (38.5)
Financial literacy score (range 0-5) 3.0 (1.5) 3.2 (1.5) 3.1 (1.5) 2.8 (1.5)

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Self-rated financial competency (range 0-7) 6.0 (1.4) 6.2 (1.2) 5.9 (1.5) 6.0 (1.5)
Heard about the scam before targeted 446 (42.1) 296 (66.1) 97 (29.7) 46 (17.6)
Prior scam victim 228 (20.4) 90 (19.6) 66 (18.6) 64 (22.5)
Mean (SD) agreement with factors associated
with scam interactions (range 1-7)
I was seeking an opportunity (Factor 1) — N/A 2.6 (1.8) 3.2 (1.9)
I felt intimidated (Factor 2) — N/A 2.7 (1.7) 3.3 (1.8)
I choose not to discuss the offer with anyone — N/A 2.7 (2.2) 3.8 (2.3)
No one was available to discuss offer with — N/A 2.1 (1.7) 2.6 (2.0)
I had little knowledge about the offer — N/A 4.5 (2.1) 6.0 (1.5)
Person/organization seemed official — N/A 3.0 (2.2) 3.4 (2.3)
Person/organization knew my personal — N/A 3.1 (2.0) 4.2 (2.1)
details
Person/organization seemed nice — N/A 0.2 (0.4) 0.2 (0.4)
Someone tried to intervene — N/A 68 (18.7) 62 (21.0)

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Table 2. Correlates of deciding to engage with a scam solicitation among all respondents and by scam category.

Model 1 Model 2 Model 3 Model 4

All scam types Opportunity-based Threat-based scams Consumer purchase
(N=1,175) scams (n=387) (n=562) scams (n=226)

OR 95% CI OR 95% CI OR 95% CI OR 95% CI

Male 1.10 0.82 1.48 0.89 0.51 1.52 1.44 0.95 2.20 0.90 0.42 1.92
Age 1.00 0.99 1.01 1.01 0.99 1.02 1.00 0.98 1.02 1.00 0.97 1.03
Non-Latino White 1.06 0.74 1.53 1.40 0.78 2.54 0.82 0.48 1.41 0.90 0.30 2.68
Married/partnered 0.86 0.63 1.19 0.56 0.31 1.03 0.93 0.59 1.47 1.36 0.61 3.02
High school or less (reference) --- --- --- --- --- --- --- --- --- --- --- ---
Some college / associate degree 0.96 0.63 1.46 1.58 0.75 3.31 0.65 0.37 1.17 1.11 0.42 2.97
Bachelor's degree or higher 0.82 0.54 1.25 1.48 0.70 3.13 0.49 0.27 0.88 1.19 0.45 3.12
HH income ≤ $25,000 (reference) --- --- --- --- --- --- --- --- --- --- --- ---
HH income $25,001 - $50,000 1.08 0.68 1.71 0.79 0.36 1.74 1.29 0.66 2.53 1.55 0.41 5.79
HH income $50,001 - $100,000 0.99 0.60 1.63 1.26 0.51 3.11 0.81 0.39 1.72 2.04 0.46 9.02
HH income ≥ $100,000 1.10 0.62 1.96 2.11 0.70 6.33 0.79 0.34 1.81 2.17 0.40 11.67
Opportunity-based scams (reference) --- --- --- --- --- --- --- --- --- --- --- ---
Threat-based scams 0.32 0.24 0.44 --- --- --- --- --- --- --- --- ---
Consumer purchase scams 1.40 0.91 2.17 --- --- --- --- --- --- --- --- ---
Loneliness 1.16 1.06 1.26 1.20 1.02 1.42 1.11 0.98 1.26 1.21 0.93 1.59
Financially fragile 0.88 0.58 1.33 1.16 0.59 2.28 0.56 0.30 1.07 2.60 0.73 9.32
Financial literacy 0.95 0.86 1.06 0.97 0.79 1.19 0.91 0.79 1.05 1.03 0.80 1.32
Self-rated financial competency 0.97 0.87 1.07 0.86 0.72 1.03 0.98 0.83 1.14 1.07 0.87 1.32
Heard about scam before targeted 0.19 0.14 0.25 0.15 0.08 0.26 0.15 0.10 0.22 0.37 0.19 0.73
Prior scam victim 1.00 0.70 1.43 1.87 0.95 3.67 0.91 0.54 1.54 0.60 0.26 1.41

Note: Bolded values are statistically significant (p<.05); OR= Odds ratio; CI= Confidence Interval

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Table 3. Correlates of scam victimization (financial loss) among all respondents and by scam category
Model 1 Model 2 Model 3 Model 4
All scam types Opportunity-based Threat-based scams Consumer purchase
(N=1,150) scams (N=380) (N=551) scams (n=219)

OR 95% CI OR 95% CI OR 95% CI OR 95% CI

Male 1.28 0.93 1.77 1.88 1.05 3.38 1.24 0.73 2.09 0.99 0.52 1.89
Age 1.01 1.00 1.02 1.01 0.99 1.03 1.01 0.99 1.03 0.99 0.97 1.02
Non-Latino White 0.97 0.66 1.41 1.14 0.58 2.26 0.98 0.50 1.90 0.86 0.36 2.06
Married / partnered 0.99 0.70 1.40 0.46 0.25 0.86 1.23 0.69 2.21 1.84 0.93 3.65
High school or less (reference) --- --- --- --- --- --- --- --- --- --- --- ---
Some college / associate degree 0.96 0.62 1.50 1.68 0.75 3.81 0.67 0.32 1.39 0.73 0.32 1.65
Bachelor's degree or higher 1.26 0.80 2.00 2.39 1.05 5.44 0.67 0.31 1.41 1.31 0.56 3.08
HH income ≤ $25,000 (reference) --- --- --- --- --- --- --- --- --- --- --- ---
HH income $25,001 - $50,000 1.47 0.91 2.37 1.01 0.47 2.16 2.31 0.90 5.94 1.73 0.58 5.19
HH income $50,001 - $100,000 1.49 0.87 2.57 2.41 1.01 5.78 1.28 0.44 3.74 1.90 0.60 6.07
HH income > $100,000 1.30 0.69 2.47 2.77 0.95 8.12 1.25 0.37 4.17 1.09 0.29 4.17
Opportunity-based scams (reference) --- --- --- --- --- --- --- --- --- --- --- ---
Threat-based scams 0.74 0.53 1.03 --- --- --- --- --- --- --- --- ---
Consumer purchase scams 2.19 1.48 3.23 --- --- --- --- --- --- --- --- ---
Loneliness 1.15 1.05 1.26 1.03 0.89 1.20 1.19 1.02 1.40 1.31 1.05 1.64
Financially fragile 2.01 1.33 3.04 4.57 2.27 9.20 0.78 0.33 1.83 2.03 0.77 5.32
Financial literacy 0.84 0.76 0.94 0.75 0.62 0.92 0.83 0.69 0.99 0.97 0.78 1.19
Self-rated financial competency 1.06 0.95 1.18 0.97 0.82 1.15 1.32 1.03 1.70 1.02 0.83 1.26
Heard about scam before targeted 0.25 0.17 0.35 0.20 0.10 0.41 0.11 0.06 0.21 0.60 0.31 1.16
Prior scam victim 1.17 0.81 1.68 1.64 0.85 3.14 1.05 0.51 2.14 1.06 0.52 2.19

Note: Bolded values are statistically significant (p<.05); OR= Odds ratio; CI= Confidence Interval

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Table 4. Correlates of victimization among those who engaged with a scam solicitation (all types and by scam category)
Model 1 Model 2 Model 3 Model 4

All scam types Opportunity-based Threat-based Consumer purchase

(N=673) scams (n=279) scams (n=223) scams (n=171)
OR 95% CI OR 95% CI OR 95% CI OR 95% CI
Loneliness 0.98 0.88 1.09 0.92 0.78 1.09 1.05 0.85 1.31 1.04 0.80 1.36
Financially fragile 1.86 1.16 3.00 2.74 1.37 5.47 0.83 0.31 2.19 1.93 0.61 6.09
Financial literacy 0.95 0.84 1.09 0.87 0.69 1.10 0.92 0.72 1.18 1.08 0.84 1.41
Self-rated financial competency 1.08 0.94 1.24 1.02 0.84 1.23 1.40 1.03 1.92 1.06 0.80 1.41
Heard about scam before targeted 0.62 0.40 0.97 0.42 0.19 0.91 0.41 0.18 0.90 1.14 0.48 2.72
Prior scam victim 1.02 0.65 1.62 1.14 0.55 2.35 1.20 0.47 3.03 0.92 0.37 2.27
I felt intimidated 1.17 0.89 1.53 1.68 1.08 2.62 0.91 0.53 1.58 0.90 0.42 1.92
I was seeking an opportunity 1.35 1.03 1.79 1.24 0.80 1.92 1.40 0.72 2.74 1.40 0.88 2.23
I chose not to discuss w/anyone 1.19 1.09 1.30 1.17 0.99 1.37 1.16 0.99 1.35 1.32 1.09 1.59
No one was available to discuss offer with 0.96 0.86 1.08 0.97 0.82 1.14 1.00 0.76 1.31 0.82 0.64 1.04
I had little knowledge about the offer 0.93 0.85 1.02 0.89 0.76 1.05 0.98 0.82 1.18 0.93 0.77 1.13
Person/organization seemed official 1.41 1.26 1.58 1.39 1.13 1.70 1.67 1.31 2.14 1.34 1.11 1.63
Person/organization knew my personal details 0.96 0.88 1.06 1.01 0.86 1.19 0.94 0.80 1.10 0.92 0.75 1.13
Person/organization seemed nice 1.14 1.03 1.27 1.05 0.86 1.28 1.17 0.96 1.42 1.16 0.95 1.42
Someone tried to intervene 0.97 0.61 1.55 1.58 0.73 3.41 0.95 0.36 2.55 0.44 0.18 1.05
Opportunity-based scams (reference) --- --- --- --- --- --- --- --- --- --- --- ---
Threat-based scams 0.37 0.22 0.60 --- --- --- --- --- --- --- --- ---
Consumer purchase scams 0.63 0.37 1.07 --- --- --- --- --- --- --- --- ---

Note: Bolded values are statistically significant (p<.05).

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Appendix A. Survey Instrument

Note: Survey data is publicly available by request through BBB Institute for Marketplace
Trust, the Better Business Bureau’s educational foundation. Researchers interested in viewing
and using the data can email Institute@IABBB.org.

1. Please tell us a little about you.

Your age ________ [Dropdown menu]
2. From the list below, please select the scam you reported to Scam Tracker. If you don’t see
the scam listed below, please choose ‘Other’.
Select one.

GOVERNMENT GRANT - In this scam, individuals are enticed by promises of free,

guaranteed government grants. The only catch is a “processing fee”. Other fees follow,
but the promised grant never materializes.
INVESTMENT - These scams take many forms, but all prey on the desire to make
money without much risk or initial funding. “Investors” are lured with false information and
promises of large returns with little or no risk.
DEBT COLLECTIONS - In this scam, phony debt collectors harass their targets, trying to
get them to pay debts they don’t owe.
TECH SUPPORT - Tech support scams start with a call or pop-up warning alerting the
target to a computer bug or other problem. Scammers pose as tech support employees
of well-known computer companies and hassle victims into paying for “support”. If the
victim allows remote access, malware may be installed.
SWEEPSTAKES/LOTTERY/PRIZES - This scam fools victims into thinking they have
won a prize or lottery jackpot, but need to pay upfront fees to receive the winnings, which
never materialize. Sometimes this con involves a fake check and a request to return a
portion of the funds to cover fees.
EMPLOYMENT- Targets are led to believe they are applying or have just been hired for a
promising new job while they have, in fact, given personal information or money to
scammers for “training” or “equipment”. In another variation, the target may be “overpaid”
with a fake check and asked to pay back the difference.
ONLINE PURCHASE - These scams involve purchases and sales, often on eBay,
Craigslist, Kijiji or other direct seller-to-buyer sites. Scammers may pretend to purchase
an item only to send a bogus check and ask for a refund of the “accidental” overpayment.
In other cases, the scammer will simply never deliver the goods.
FAKE CHECK/MONEY ORDER - In this scam, the victim deposits a phony check and
then returns a portion by wire transfer to the scammer. The stories vary, but the victim is
often told they are refunding an “accidental” overpayment. Scammers count on the fact

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RUNNING HEAD: CORRELATES OF COMPLIANCE

that banks make funds available within days of a deposit, but can take weeks to detect a
fake check.
TRAVEL/VACATIONS - Scammers post listings for properties that either are not for rent,
do not exist, or are significantly different than pictured. In another variation, scammers
claim to specialize in timeshare resales and promise they have buyers ready to
purchase.
TAX COLLECTION - In this scam, imposters pose as government tax collection agents
and use threats of immediate arrest or other scare tactics to convince their targets to pay,
often requesting that the target load money onto gift cards as payment.
PHISHING- Communication impersonating a trustworthy entity, such as a bank or
mortgage company, intended to mislead the recipient into providing personal information
or passwords.
ADVANCE FEE LOAN - In this scam, a loan is guaranteed but, once the victim pays
upfront charges such as taxes or a “processing fee,” the loan never materializes.
Other (please specify):

3. Which of the following best describes the incident you reported to the BBB Scam Tracker?
Select one.

I reported a scam that happened to me. (Go to question number 4.)

I reported a scam that happened to someone else. Go to end of chapter

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4. Which of the following best describes how the scam attempt began?
Select one.

A window popped up on my computer

I was contacted via phone
I received an email
I met the scammer in person
I received a letter
I read about it on social media
I was left a phone message
I was contacted via text message
I saw an ad or public communication
Other (please specify):

5. What was your primary motivation for reporting the scam?

Select one.

Wanted to provide information that may help catch the scammers

Wanted BBB to help me get my money back
Wanted to warn other consumers about the scam
I was told to report to BBB by law enforcement or another organization
Other (Please explain.):

*6. Did you lose money on the scam?(*Required)

Select one.

Yes (Answer question number 6.1, 6.2.)

No (Answer question number 6.3.)
Not sure

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6.1 How much did you lose in U.S. dollars?

6.2 Did you receive any portion of your money back or whatever was promised to you by
engaging in the transaction?
Select one.

Yes
No

6.3 From the options below, what helped you to avoid being scammed? (Check all that
apply.)
Select all that apply.

I checked the background of the scammer

I knew about the methods and behaviors of scammers in general
I researched the type of scam/offer I was targeted for
I had experience with scams
I knew about the particular type of scam
I felt something wasn't right about the situation

7. (This item is included so we know you're paying attention and you're not a robot.) Which
word begins with the letter "T".
Select one.

Foot
Hand
Toe
Head
Neck

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*8. Which of the following best describes your experience with the scam you
reported?(*Required)
Select one.

I immediately knew it was a scam and did not engage at all (ignored the
email/letter/phone call/sales person, hung up the phone, etc.)
I suspected it might be a scam but (Answer question number 8.1, 8.2, 8.3, 8.4, 8.5,
continued 8.6, 8.7, 8.8.)
I didn't know or suspect it was a (Answer question number 8.5, 8.7, 8.8.)
scam

8.1 During the scam, at what point did you suspect it might be a scam?
Select one.

Near the start

About halfway through
Toward the end
After it was all over

8.2 What do you think caused you to engage, or continue to engage, even after you
suspected it might be a scam?

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8.3 What do you think might have stopped you from engaging?

8.4 Did you talk to someone you know about the offer or situation while it was happening, that
is, before it concluded?
Select one.

Yes
No
Can't recall

8.5 Did any organization, company, or agency intervene or try to intervene to stop the
transaction? This may include a wire transfer company (e.g., Western Union), your financial
institution, a retail store worker, etc.
Select one.

Yes
No

8.6 If YES, please describe the intervention and be sure to name the organization, company
or agency that intervened:

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8.7 Thinking back, when you were experiencing the scam you reported, which of the following
were true? Please give your answer on a 1-7 scale, where 1="Strongly disagree" 7="Strongly
agree" and 4="Neither agree nor disagree." You can use any number from 1 to 7.
Select one per row.

1 = Strongly 7 = Strongly
2 3 4 5 6
disagree agree

I felt that I had an opportunity to make

good on past mistakes

I felt afraid of being punished for

something I had done

I felt that I had an opportunity to get

ahead financially

I felt that it was "my time" and I

deserved to be rewarded

I felt I was under time pressure

I felt intimidated by the person I was

dealing with

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8.8 Thinking back, when you were experiencing the scam you reported, which of the following
were true? Please give your answer on a 1-7 scale, where 1="Strongly disagree" 7="Strongly
agree" and 4="Neither agree nor disagree." You can use any number from 1 to 7.
Select one per row.

1 = Strongly 7 = Strongly
2 3 4 5 6
disagree agree

The person/organization seemed official

I chose not to discuss it with anyone

I worried about missing out on an

opportunity

I had little knowledge about what the

person presented

I wanted to please the person I was

dealing with

The person/organization seemed to know

personal details about me

I didn't have anyone to discuss it with

I thought the person was nice

9. Before you were targeted by the scam, had you heard about this type of scam before (e.g.,
from friends/family, on the news, from social media, etc.)?
Select one.

Yes
No
Not sure

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10. Of the following sources of information, choose the top three that you believe would be
most helpful to you to learn about scams.
Select at most 3 choices.

Tweets or other social media messaging from consumer protection groups

A news story or article about scams
An educational brochure about the scam
An educational announcement during a television or radio commercial break or before a
YouTube video
Researching different scams on the internet
A website
Word of mouth
In-person meeting or educational seminar
Other (please specify):

11. Think about what you know about scams. Where did this information come from? (Select
all that apply.)
Select all that apply.

Tweets or other social media messaging from consumer protection groups

A news story or article about scams
An educational brochure about the scam
An educational announcement during a television or radio commercial break or before a
YouTube video
Researching different scams on the internet
A website (Answer question number 11.1.)
Word of mouth
In-person meeting or educational seminar
Other (please specify):

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RUNNING HEAD: CORRELATES OF COMPLIANCE

11.1 What website (or websites) did you use?

12. If I had been targeted by the same scam when I was younger, I would have been:
Select one.

more likely to lose money

less likely to lose money
neither more or less likely to lose money

13. Please indicate how much you agree or disagree with the following statements. Please
give your answer on a 1-7 scale, where 1="Strongly disagree" 7="Strongly agree" and
4="Neither agree nor disagree" You can use any number from 1 to 7. Scammers typically will
try to target...
Select one per row.

1= Strongly 7 = Strongly
2 3 4 5 6
disagree agree

wealthy people

pregnant women

the disabled

older adults

young adults

single mothers with small

children

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RUNNING HEAD: CORRELATES OF COMPLIANCE

14. The next questions are about how you feel about aspects of your life. Please answer as
honestly as possible. How much of the time do you feel...
Select one per row.

Often Some of the time Hardly ever or never

left out?

you lack companionship?

isolated from others?

15. Please indicate how much you agree or disagree with the following statements. Please
give your answer on a 1-7 scale, where 1="Strongly disagree" 7="Strongly agree" and
4="Neither agree nor disagree" You can use any number from 1 to 7.
Select one per row.

7=
1 = Strongly
2 3 4 5 6 Strongly
disagree
agree

Scam victims lack common sense

Most people are good

When people fall for a scam, it is generally

their own fault

I am good at math

I am the type of person who can be easily

scammed

Scam victims are gullible

I am good at dealing with day-to-day financial

matters, such as checking accounts, credit
and debit cards, and tracking expenses

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16. How strongly do you agree or disagree with the following statement? Please give your
answer on a 1-7 scale, where 1= "Strongly disagree" 7="Strongly agree" and 4="Neither
agree nor disagree" You can use any number from 1 to 7.
Select one per row.

1 = Strongly 7 = Strongly
2 3 4 5 6
disagree agree

I have too much debt right

now

17. How confident are you that you could come up with $2,000 if an unexpected need arose
within the next month?
Select one.

I am certain I could come up with the full $2,000

I could probably come up with $2,000
I could probably not come up with $2,000
I am certain I could not come up with $2,000
Don't know
Prefer not to say

18. Suppose you had $100 in a savings account and the interest rate was 2% per year. After
5 years, how much do you think you would have in the account if you left the money to grow?
Select one.

More than $102

Exactly $102
Less than $102
Don’t know
Prefer not to say

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19. Imagine that the interest rate on your savings account was 1% per year and inflation was
2% per year. After 1 year, how much would you be able to buy with the money in this
account?
Select one.

More than today

Exactly the same
Less than today
Don’t know
Prefer not to say

20. If interest rates rise, what will typically happen to bond prices?
Select one.

They will rise

They will fall
They will stay the same
There is no relationship between bond prices and the interest rate
Don’t know
Prefer not to say

21. A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage,
but the total interest paid over the life of the loan will be less.
Select one.

True
False
Don’t know
Prefer not to say

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RUNNING HEAD: CORRELATES OF COMPLIANCE

22. Buying a single company’s stock usually provides a safer return than a stock mutual fund.
Select one.

True
False
Don’t know
Prefer not to say

23. Over the past year, would you say your household's spending was less than, more than,
or equal to your household's income? Please do not include the purchase of a house or new
car, or any other large investments you may have made.
Select one.

Spending less than income

Spending more than income
Spending equal to income
Don't know
Prefer not to say

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RUNNING HEAD: CORRELATES OF COMPLIANCE

24. Please indicate how much you agree or disagree with the following statements. Please
give your answer on a 1-7 scale, where 1="Strongly disagree" 7="Strongly agree" and
4="Neither agree nor disagree" You can use any number from 1 to 7.
Select one per row.

7=
1 = Strongly
2 3 4 5 6 Strongly
disagree
agree

When I get what I want, it's usually because I

am lucky

My life is determined by my own actions

To a great extent, my life is controlled by

accidental happenings

People like myself have very little chance of

protecting interests when they conflict with
those of strong pressure groups

I can pretty much determine what will happen

in my life

Often there is no chance of protecting my

personal interests from bad luck happening

I am usually able to protect my personal

interests

I feel like what happens in my life is mostly

determined by powerful people

My life is chiefly controlled by powerful others

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25. How well do the following statements describe your personality? I see myself as someone
who . . .
Select one per row.

Disagree Disagree a Neither agree Agree a Agree

strongly little nor disagree little strongly

tends to find fault

with others

is reserved

is relaxed, handles
stress well

is outgoing,
sociable

tends to be lazy

has few artistic

interests

does a thorough
job

has an active
imagination

is generally trusting

gets nervous easily

26. Have you lost money in other frauds or scams?

Select one.

Yes
No
Not sure

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27. Estimated annual household income.

Select one.

Less than $25,000

$25,001 - $35,000
$35,001-$50,000
$50,001-$75,000
$75,001-$100,000
$100,001-$125,000
$125,001-$150,000
Greater than $150,000

28. Is there anything else you'd like to tell us about the scam you reported to BBB Scam
Tracker?

29. How well do you recall the details of the scam you reported?
Select one.

Clear, like it was yesterday

I remember most of the details
I remember the important details
I remember some of the details
I’ve forgotten most of the detail

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Appendix B. Bivariate correlations (N = 1,175)

Variable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
1. Male -

2. Age .10** -

3. Non-Latino white
0.05 .18** -
4.Married/partnered .13** 0.06 .10** -

5. Education -0.03 0.03 0.03 0.01

-
6. Income .077* 0.05 .081** .42** -0.01 -
7. Loneliness -0.01 -.14** 0.01 -.28** -0.01 -.28** -

8. Financially fragile -.14** -.26** -.16** -.17** 0.01 -.40** .26** -

9. Financial literacy .22** .19** .16** .10** -.07* .35** -.11** -.31** -

10. Self-rated financial

0.03 .14** .08** .07* -0.05 .12** -.21** -.17** .15** -
competency
11. Heard about scam before
-0.00 .12** .06* 0.06 -0.00 .09** -.06* -.14** 0.05 .07* -
being targeted
12. Prior scam victim 0.02 -0.04 -0.04 -.07* 0.03 -.14** .13** .16** -0.05 -.08** 0.05 -

13. I felt intimidated -0.06 0.04 -0.07 -.10* 0.04 -.11** .12** .12** -.08* -0.03 -0.07 0.08 -
14. I was seeking an
0.07 -.21** -.13** -0.02 -0.01 -.15** .20** .22** -.10** -.14** -.10* .11** 0.05 -
opportunity
15. I chose not to discuss
0.045 .11** 0.02 -.11** -0.01 -.13** .17** .15** -0.05 -0.07 -0.05 .15** .21** .20** -
w/anyone
16. No one was available to
0.02 .11** -0.01 -.16** 0.02 -.17** .26** .14** -.18** -.08* -0.04 0.07 .33** .10* .38** -
discuss offer with

17. I had little knowledge

0.01 -0.02 -0.02 -0.06 0.01 -0.04 .12** 0.03 -0.01 -.10* -.11** 0.03 .35** .16** .24** .22** -
about the offer
18.Person/organization
-0.06 -0.02 -0.04 0.01 -0.05 -0.04 .08* .12** -.08* 0.01 -.18** 0.04 .24** .21** .17** .19** .19** -
seemed official
19.Person/organization knew
0.02 0.05 -0.07 -0.02 0.03 -0.04 0.03 0.05 -0.07 -0.06 -.09* 0.04 .43** .08* .19** .24** .28** .23** -
my personal details
20.Person/organization
-0.04 -0.01 -0.05 -0.00 -0.03 -.14** .14** 0.06 -0.06 0.01 -.12** .10* .18** .39** .18** .17** .20** .42** .19** -
seemed nice
21. Someone tried to intervene -0.026 0.053 -0.06 -0.046 0.027 0.01 0.035 0.017 0.021 -0.071 -0.058 0.014 0.002 0.017 0.042 -0.01 -0.031 .111** -0.014 0.018 -

22. Opportunity-based scams -0.02 -.15** -.12** -.07* -0.03 -.13** .11** .17** -.09** -.11** -.13** 0.05 -.11** .53** .13** -0.06 0.06 -0.01 -0.03 .20** -0.04 -

23. Threat-based scams 0.04 .21** 0.05 0.04 0.06 .11** -.08** -.14** .07* .11** .21** -0.05 .30** -.43** -0.06 .14** .12** 0.02 .27** -.11** -0.01 -.67** -

24. Consumer purchase scams -0.03 -.09** .08** 0.03 -0.03 0.01 -0.03 -0.02 0.02 -0.008 -.11** 0.00 -.20** -.14** -.08* -.08* -.20** -0.02 -.25** -.10** 0.05 -.34** -.47** -

Note: *p < .05, **p < .01, ***p < .001

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Appendix C. Factor loadings and communalities based on a principal axis factoring analysis with promax
rotation and Kaiser Normalization for 7 items (n = 673)

Factor 1 Factor 2
Items I was seeking I felt
opportunity intimidated

I felt that I had an opportunity to get ahead financially .88 -.14

I felt that I had an opportunity to make good on past mistakes. .60 .29

I felt that it was "my time" and I deserved to be rewarded .76 .10

I worried about missing out on an opportunity .82 -.10

I felt afraid of being punished for something I had done .05 .75

I felt I was under time pressure .04 .75

I felt intimidated by the person I was dealing with -.11 .80

Reliability (α) 0.78 0.71

Note: Items in which communalities were lower than 0.3 were removed (n=7).

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