Financial Industry Regulatory Authority report finds only half of Americans identify identity-based fraud as annual losses near USD 200 billion

The Financial Industry Regulatory Authority's Investor Education Foundation has published research indicating that many Americans do not readily recognize common forms of financial fraud, potentially increasing their exposure to scams as fraud losses approach USD 200 billion a year. The report, based on work with RAND, found that identity-based fraud was the most top-of-mind category but was mentioned by only 50% of respondents when asked, without prompts, to describe common fraud schemes or tactics. The nationally representative survey of 1,509 U.S. adults measured unprompted awareness across five broad fraud categories: consumer-based, opportunity-based, threat-based, imposter-based and identity-based fraud. Awareness was materially lower outside identity-based fraud, with 20% mentioning threat-based fraud, 17% opportunity-based fraud, 16% consumer-based fraud and 14% imposter-based fraud. Results also varied across groups, including lower recognition of consumer-based fraud among adults under 40, lower mention of identity-based fraud among Hispanic respondents than white respondents, and lower awareness of threat-based fraud among lower-income respondents than among those earning USD 50,000 or more. The study further found that higher financial literacy increased the likelihood of identifying nearly all fraud types, and that respondents who mentioned threat-based fraud were less likely to report losing money to a scam.