Study Highlights Americans’ Concerns About Financial Fraud
Inside Subprime: March 14, 2019
By Grace Austin
A new study shows that the vast majority of Americans are worried about financial fraud and a significant amount have been recently scammed.
A LIMRA Secure Retirement Institute study found that 79 percent of American consumers are concerned about financial fraud, and 36 percent said they were very worried about it.
And it’s not something to take lightly — in 2017, nearly $17 billion was lost to identity theft. More than 1 million additional American consumers were taken advantage of from the year before.
In addition, a quarter of Americans report they’ve been a victim of a financial scam, with 13 percent victimized in the past two years. Most study respondents said they’re worried about things like credit cards and personal checking accounts being defrauded the most.
The study reports 83 percent of Americans with credit cards say they are concerned about fraud affecting their credit cards. That’s not without merit — credit card fraud is still the greatest target for new account fraud.
The report, “Financial Fraud and Retirement Accounts: An Opportunity to Engage, Educate and Build Trust,” indicated that American consumers are less worried about retirement accounts and longer-term financial products being touched by scammers.
A little more than half of those with retirement plans are concerned about their retirement plan through work being defrauded.
Analysis by LIMRA shows that fraud is actually increasing in those areas though, including life insurance, retirement plans and similar financial products.
Analysts attribute it to the larger amount of money that those products hold, and the improving security technology surrounding credit and debit cards that makes it harder for scam artists to steal from those sources.
And it makes sense that concern about some types of financial fraud was higher for some Americans — the study found millennials were the least likely to be worried about scams.
But they were also more likely to have been taken advantage of by financial fraud, with nearly a fifth of millennials reporting being victims within the last two years. Interestingly enough, reporting of being a victim of a financial scam went down by each generation, with about 10 percent of baby boomers saying they were a victim recently.
Millennials were also less likely to be checking their retirement accounts, which is understandable as they have the most years until retirement age.
Analysts say millennials might be the least worried about fraud because they have smaller amounts in their accounts than older Americans. But they warn that doesn’t mean they’re less likely to be targeted by scammers, and that they may be at a greater risk because they tend to share more personal information online, possibly through social media or online shopping.
Analysts say there is good news — American consumers do want to become more educated about preventing fraud. More than two-thirds of consumers reported wanting to “receive information about how to detect and prevent financial fraud from financial service companies.”