Can educational interventions reduce susceptibility to financial fraud?

Financial fraud is pervasive and can be devastating for its victims. While there are numerous campaigns designed to warn and educate consumers about financial fraud, there is very little evidence on whether these initiatives are effective at reducing susceptibility to scams. We conduct a survey expe...

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Published inJournal of economic behavior & organization Vol. 198; pp. 250 - 266
Main Authors Burke, Jeremy, Kieffer, Christine, Mottola, Gary, Perez-Arce, Francisco
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.06.2022
Online AccessGet full text
ISSN0167-2681
1879-1751
DOI10.1016/j.jebo.2022.03.028

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Abstract Financial fraud is pervasive and can be devastating for its victims. While there are numerous campaigns designed to warn and educate consumers about financial fraud, there is very little evidence on whether these initiatives are effective at reducing susceptibility to scams. We conduct a survey experiment among a representative sample of U.S. adults and find that short, online educational interventions can meaningfully reduce fraud susceptibility, and that effects persist for at least three months if, and only if, a reminder is provided. Investigating mechanisms, we find no evidence that the educational intervention reduced willingness to invest generally, but rather increased knowledge which participants were able to selectively apply. We find some evidence that beneficial effects are concentrated among individuals who are more likely to invest, particularly the financially sophisticated. Our results indicate that brief financial education interventions can meaningfully reduce susceptibility to financial fraud.
AbstractList Financial fraud is pervasive and can be devastating for its victims. While there are numerous campaigns designed to warn and educate consumers about financial fraud, there is very little evidence on whether these initiatives are effective at reducing susceptibility to scams. We conduct a survey experiment among a representative sample of U.S. adults and find that short, online educational interventions can meaningfully reduce fraud susceptibility, and that effects persist for at least three months if, and only if, a reminder is provided. Investigating mechanisms, we find no evidence that the educational intervention reduced willingness to invest generally, but rather increased knowledge which participants were able to selectively apply. We find some evidence that beneficial effects are concentrated among individuals who are more likely to invest, particularly the financially sophisticated. Our results indicate that brief financial education interventions can meaningfully reduce susceptibility to financial fraud.
Author Kieffer, Christine
Perez-Arce, Francisco
Mottola, Gary
Burke, Jeremy
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  organization: University of Southen California, Center for Economic and Social Research, Los Angeles, CA 90007, United States
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Snippet Financial fraud is pervasive and can be devastating for its victims. While there are numerous campaigns designed to warn and educate consumers about financial...
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Title Can educational interventions reduce susceptibility to financial fraud?
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