Financial Fraud Victims: FINRA
Non-financial costs such as stress, health problems are frequently experienced by victims of financial fraud, according to a FINRA study.
The FINRA Investor Education Foundation commissioned Applied Research & Consulting LLC to study the non-traditional costs of financial and investment fraud, then published a report titled: “Non-Traditional Costs of Financial Fraud Research Report” in March 2015.
Stress – The most commonly cited non-financial cost
As part of the study, ARC conducted a nationally distributed online survey of 600 self-reported fraud victims, by giving a list of 20 scenarios of financial fraud.
The respondents were asked whether they thought they may have been defrauded in any of the above ways. Overall, three quarters of the sample indicated they had been defrauded by answering “yes” to at least one of the 20 specific types of financial fraud tested.
he respondents were also asked to think about the fraudulent incident that they considered to be the most serious. Interestingly, the amount of money lost varied considerably, with about a third of respondents losing less than $500, about the same proportion who losing between $500-$5,000 and 24% who lost $5,000 or more:
Amount lost in fraudulent incident Financial Fraud Valuewalk
Financial Fraud Also Costs Victims Stress, Anxiety, Depression: FINRA Report
A recent report by the financial industry’s independent regulatory agency indicates that victims of investment fraud not only suffer economic damages, but also often suffer stress, anxiety, depression and other psychological injuries.
The Financial Industry Regulatory Authority (FINRA) issued a research report last month, titled “Non-Traditional Costs of Financial Fraud” (PDF), which suggests that two thirds of all cases of financial fraud also result in non-financial harm for the investor.
“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,” Gerri Walsh, the foundation’s president, said in a press release. “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.”
The report was created by the FINRA Education Foundation, and found that the most common non-financial side effect of financial fraud was severe stress.
Researchers conducted a survey of 600 self-reported fraud victims who were 25 or older and who have primary or shared decision-making responsibility in their household’s financial decisions. Aboutlawsuits
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 Walsh.
Non-Traditional Costs of Financial Fraud found that:
nearly two thirds (65 percent) reported experiencing at least one type of non-financial cost to a serious degree; and
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). Finra
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