How has fraud prevention evolved?
In the 1980s and 1990s, the basic theory behind fraud prevention efforts was to provide as many consumers with as much factual information as possible so they will not fall prey. In a nutshell: forewarned is forearmed.
While many state government agencies and national consumer agencies were churning out brochures and videos to distribute this information, some early studies were beginning to show that most consumers already knew a lot of the basic facts about how fraud works and many could parrot back prevention phrases like “if it sounds too good to be true, it probably is.” Yet these same people were being victimized anyway. Another piece of research showed that particularly seniors found it difficult to politely end interactions with telemarketers (AARP, 1996).
Thus, the next iteration of fraud prevention was the development of specific tools like refusal scripts to get people off the phone when they were confronted with a scam artist. While these anti-fraud efforts in the mid to late 1990s represented huge commitments of resources, with dozens of government and social sector agencies throughout the country working together, they proved to be unsustainable, partly due to expense, but largely due to the fact that potential fraud victims represent a particular subset of people. As such, an initiative directed towards to public at large was particularly inefficient. In addition, such a “one size fits all” approach didn’t account for the significant difference between victim types. Different messages are needed for an 80-year-old female widow who meets the lottery victim profile than for a 57-year-old male business owner who meets the investment victim profile.
Secondly, there was little, if any, research showing that brochures and videos actually prevented fraud, which made it hard to sustain funding for such activities. The only evaluation data from these early efforts were output metrics such as total number of people reached. Little behavior change research was conducted to determine if these efforts increased resistance to fraud appeals.
Finally, early attempts to forewarn consumers were not informed by the psychology literature, especially what is known about individual resistance to prevention messages such as the illusion of invulnerability (I can’t be taken), psychological reactance (don’t tell me what to do), threats to self-esteem (I am not a bad person) and, more recently information overload (I don’t have time to read one more thing).
The latest efforts to incorporate the latest psychological, education, and decision making research into fraud prevention seeks to incorporate this sophisticated understanding. Look for upcoming findings in research and fraud prevention in our News, Research Implications, and Research Archive.