Forewarning Reduces Fraud Susceptibility in Vulnerable Consumers

Abstract

Telemarketing fraud is pervasive and older consumers are disproportionally targeted. Given laboratory research showing that forewarning can effectively counter influence appeals, we conducted a field experiment to test whether forewarning could protect people who had been victimized in the past. A research assistant with prior experience as a telemarketer pitched a mock scam two or four weeks after participants were warned about the same scam or an entirely different scam. Both warnings reduced unequivocal acceptance of the mock scam although outright refusals (as opposed to expressions of skepticism) were more frequent with the same scam warning than the different scam warning. The same scam warning, but not the different scam warning, lost effectiveness over time. Findings demonstrate that social psychological research can inform effective protection strategies against telemarketing fraud.

Individual differences in loss aversion and preferences for skewed risks across adulthood.

“…Understanding why some individuals are susceptible to this decision-making bias is important because it has the potential to facilitate the identification of individuals who are vulnerable to taking skewed risks in the real world, such as falling victim to financial fraud. Brief assessments of skew bias, such as the one used here, may enable rapid identification of susceptibility so that interventions can be implemented before individuals take drastic skewed risks in everyday life (Scheibe et al, 2014). …”

The concept of consumer vulnerability: Scale development and validation

“…Although consumer vulnerability plays a crucial role in consumer welfare research, a universally accepted definition has not yet emerged. Most consumer vulnerability studies focus on a specific disadvantaged group, such as the young (e.g., An, Jin, & Park, ), the elderly (e.g., Lyon, Kinney, & Colquhoun, ; Scheibe et al, ), the undereducated (e.g., Jae & Viswanathan, ) and the poor (e.g., Lee & Soberon‐Ferrer, ). For example, most children do not recognize a firm's intent in advertising, so they exhibit an incorrect understanding and nonskeptical attitude toward ads (An et al, ).…”

“…For example, most children do not recognize a firm's intent in advertising, so they exhibit an incorrect understanding and nonskeptical attitude toward ads (An et al, ). For the elderly, the ever‐changing shopping environment has made searching and assessing information difficult, thereby forcing them to make decisions using peripheral cues such as direct mail solicitations and telemarketing (Gregory, ; Lyon et al, ; Scheibe et al, ). Similarly, low‐literacy consumers evince deficits in comprehension when confronting misleading stimuli, which could make them more likely to become victims (Jae & Viswanathan, ).…”

Older adults and fraud: Suggestions for policy and practice

“…While there is already research suggesting that forewarning of scams results in lower fraud susceptibility among older adults (Scheibe et al, 2014), it would be helpful to know exactly which types of warnings are the most successful (phone calls? email?…”

“…Also related to changes in the brain, this bias seems to exist to help keep older adults' moods and morale high (Brassen, Gamer & Büchel, 2011). Yet despite these potential benefits, this bias can have perilous consequences for their financial security, leading them to ignore warning signs such as the aggressiveness or insistence of a telemarketer and to focus only on the potential rewards or profits they promise (Harlé & Sanfey, 2013;Samanez-Larkin et al, 2013;Scheibe et al, 2014).…”