Consumer fraud happens all over the world. Though the types of fraud may differ in the order of frequencies from country to country, most scams in the world today use similar methods and technology and have similar victim profiles.
Australians are more susceptible to investment fraud but Americans fall victim to identity theft more than any other type of fraud.
Data from both countries though suggests that older people lose more money to scams than the younger generation and telephone calls are still the most common way to be contacted by scammers.
The US Federal Trade Commission (FTC) tracks reported fraud and in 2020 its data revealed the most frequent method of contact is by telephone calls (31 per cent) followed by text messages (27 per cent) and emails (15 per cent).
Surprisingly, social media and mobile applications only made six per cent and 11 per cent respectively of the total number of fraud contact methods.
Despite these low figures, communication through social media and mobile applications makes up the two biggest average number of monetary losses per fraud.
In America, the online fraudster makes more money per victim than the conventional telephone fraudster. FTC data also revealed that young people are as susceptible to fraud as much as the elders.
However, the elderly lose much more money on average to fraud compared to young people.
We all have known somebody who has received scam calls intending to fraudulently part us with our hard-earned money.
Using data from a survey done by a spam-blocking company, it takes about 1,515 attempts to create one profitable fraud.
In economics, this is known as the power law where a small number of successful fraud calls will create most of the scam bounty from hundreds of thousands of call attempts.
Technology has made it so much easier for us to communicate with each other that unsuccessful calls are costless to the scammer. All a scammer has to do is be patient and wait.
Since the last 20 years, the number of reported fraud cases in America has increased by over 1,000 per cent. The trend in America is likely being replicated in most countries as technology enables easier access to people.
Thus, it is no surprise that the older generation loses more money to scams. They have more savings than younger people. However, older people may have less opportunity to generate income after being scammed.
Though the use of social media and mobile applications is now ubiquitous, direct calls are still the method mostly used in scams.
The use of social media and apps in fraud may increase in the future but with telephone calls, contact is more personal. A skilful scammer can manipulate conversations and psychology can be applied more directly. They can back you to a corner and make you feel defensive using the information you have voluntarily provided them.
To protect our elders, we can educate them on telephone scam tactics. Let them know it is okay to hang up or not reply to questions that involve personal information.
If they worry about some unknown mistake, assure them communication will likely be through a formal letter and they should insist matters be settled formally.
Most importantly, make yourself available as a resource to them.
This is the personal opinion of the writer and does not necessarily represent the views of Twentytwo13.