The Institute for Behavioral and Household Finance White Paper Series Scamming Grandma: Financial Fraud and the Impact on Households Samantha Nielsen Cornell University © 2019 All rights reserved. White Paper No. 7-2019 May 2019 The Institute for Behavioral and Household Finance Cornell University ꞏ The Charles H. Dyson School of Applied Economics and Management ꞏ Warren Hall, Ithaca, NY 14853 ꞏ E-mail:
[email protected] ꞏ http://ibhf.cornell.edu Institute of Behavioral and Household Finance – White Paper Series White Paper: 07-2019 Overview more by scammers, are more educated on where to file a complaint, are more interested in Many Americans have experienced or know of a combatting fraud, or a combination of these or person who has fallen victim to a financial scam, other factors. and as social media platforms, online databases, and internet services expand, reports of these Figure 1: Historical Household Financial Fraud Reports scams become more widespread. While word-of- 1,800,000 mouth stories and news vehicles raise awareness, 1,600,000 there is limited existing research analyzing the 1,400,000 financial impact of these scams on households. 1,200,000 1,000,000 Figure 1 illustrates the total number of annual 800,000 600,000 fraud reports in the United States. From 2007 to 400,000 2016, an increase of 157% was seen in the 200,000 number of reported financial scams. More 0 recently, in 2018, there were 1,427,563 fraud reports, which is up 25% from 2017. The amount Source: Consumer Sentinel Network, 2007-2016 of 2018 reports with a monetary loss increased 48% to 358,755 from the year prior, and the Figure 2: Fraud Reports by Age Group median monetary loss for all fraud reports was down $375 in 2018, 13% less than the year prior.1 140,000 120,000 100,000 When we look at fraud reports by age group, a 80,000 significant increase in frauds reported by older 60,000 40,000 age cohorts is identified.