ICFE eNEWS #15-7 - March 20th 2015
Foundation Research Reveals Fraud Victims Vulnerable to Severe
Stress, Anxiety and Depression
WASHINGTON — The FINRA Investor Education Foundation issued a
new research report, Non-Traditional
Costs of Financial Fraud, which found that nearly two
thirds of self-reported financial fraud victims experienced at
least one non-financial cost of fraud to a serious
degree—including severe stress, anxiety, difficulty sleeping and
depression. While the Stanford Financial Fraud Research Center
estimates that $50 billion is lost to financial fraud every
year, the FINRA Foundation's innovative research examines the
broader psychological and emotional impact of financial fraud.
"Fraud's effects linger and cause distress well after the
scam is over. For the first time, we have data on the deep toll
that fraud exerts on its victims, and the results are sobering.
This new research underscores the importance of the FINRA
Foundation's work with an array of national, state and local
partners to help Americans avoid fraud, and assist consumers who
have been defrauded," said FINRA Foundation President Gerri
Non-Traditional Costs of Financial Fraud found
Non-Traditional Costs of Financial Fraud found that, beyond the
psychological and emotional costs, nearly half of fraud victims
reported incurring indirect financial costs associated with the
fraud, such as late fees, legal fees and bounced checks.
Twenty-nine percent of respondents reported incurring more than
$1,000 in indirect costs, and 9 percent declared bankruptcy as a
result of the fraud.
- nearly two thirds (65 percent) reported experiencing at
least one type of non-financial cost to a serious degree;
- the most commonly cited non-financial costs of fraud are
severe stress (50 percent), anxiety (44 percent), difficulty
sleeping (38 percent) and depression (35 percent).
Additionally, nearly half of victims blame themselves for the
fraud—an indication of the far-reaching effects of financial
fraud on the lives of its victims.
The FINRA Foundation's survey was administered online in August
of 2014, and 600 self-reported fraud victims responded to the
survey. Non-probability quota sampling was used to obtain the
sample, and respondents were 25 years of age or older. A pure
probability sample of this size would have an estimated margin
of error of four percentage points at the 95 percent confidence
level. As in all survey research, there are possible sources of
error, such as coverage, nonresponse and measurement error that
could affect the results. Additional methodological information
can be found in the full report.
The FINRA Investor Education Foundation supports innovative and
educational projects that give underserved Americans the
knowledge, skills and tools necessary for financial success
throughout life. For details about grant programs and other
FINRA Foundation initiatives, visit FINRAfoundation.org
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Paul S. Richard
President - Executive Director
Institute of Consumer
Financial Education (ICFE)
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.