The recent crisis in the American economy has threatened the financial security of millions of Americans. But it has also revealed another problem: the proliferation of widespread financial fraud, from massive Ponzi schemes such as the Bernard Madoff case to the millions of consumers who fall prey to fake lotteries or time-tested frauds like work at home schemes and online phishing. Financial fraud – and how to stop it – continues to be an issue involving people of all ages, with particular challenges for older Americans. The Stanford Center on Longevity and the AARP Foundation convened a consensus conference at Stanford in October 2009. Experts in the social sciences, law enforcement and advocacy sectors came together to address such questions as:
What is known at the present time about the nature of financial fraud? What are the conditions that make people most susceptible to falling for scams? What psychological tendencies might make particular groups of people especially vulnerable? What questions, if answered, might lead to practical solutions to prevent fraud?
The conference followed a model the Center on Longevity has developed, which has proven effective in generating focused and productive discussions about the available science in a particular area and innovative ideas about practical solutions. The first step is identifying top experts from relevant disciplines and professions; typically, the center convenes people who do not typically interact with one another on a regular basis. About a month before the meeting takes place, an online blog enables participants to jumpstart the conversation by identifying key ideas to pursue systematically when the experts convene. At the conference, the group of experts is ready to begin a targeted discussion that focuses on practical solutions to the problem or issue at hand.
Participants in the conference identified a number of followup steps, including the need to bring together research, which has often been viewed in isolation, and to explore new ideas to attack the problem. Following up on the conference, the Center on Longevity will continue to work with participants and other experts to explore ideas for additional research and analysis, which include:
Scalability and effectiveness of general population anti-fraud messaging that can deter victimization Viral video messages within a new media context Effectiveness of “gotcha” prevention tactics Effectiveness of technology-based fraud prevention tools Effectiveness of anti-fraud curriculum in high schools
Persistence effects of the peer counseling methods (AARP Fraud Fighter Call Centers) Predictive value of positivity/negativity motivation on fraud victimization Victim/general population differences in expectations of gain and loss Comparative effectiveness anti-fraud messaging delivered in different methods (DVD long-form, DVD short-form) and in different channels (live vs. electronic/viral) (FINRA anti-messaging DVD)
Profiling of individuals who successfully resisted a fraud attempt Identification of naturally-occurring moments in time that create vulnerability to fraud Identification of vulnerable moments artificially created by con men New bank regulations that immunize or protect victims from fraud