Can Educational Interventions Reduce Susceptibility to Financial Fraud?

49 Pages Posted: 14 Jan 2021 Last revised: 16 Jan 2021

See all articles by Jeremy Burke

Jeremy Burke

Center for Economic and Social Research (CESR)

Christine N Kieffer

Senior Director, FINRA Foundation's Investor Protection Campaign

Gary R. Mottola

Research Director FINRA Foundation

Francisco Pérez-Arce

Center for Economic and Social Research (CESR)

Date Written: December 11, 2020

Abstract

Financial fraud is pervasive and can be devastating for its victims. While numerous campaigns designed to warn and educate consumers about financial fraud exist, there is very little evidence on whether these initiatives are effective at reducing susceptibility to scams. We conduct a randomized experiment among a representative sample of U.S. adults and find that short, online educational interventions can meaningfully reduce fraud susceptibility, and that effects persist for at least three months following a reminder. Investigating mechanisms, we find no evidence that the educational intervention reduced willingness to invest generally, but rather increased knowledge which participants were able to selectively apply. We find that beneficial effects are concentrated among individuals who are more likely to invest, particularly the financially sophisticated. Our results indicate that brief financial education interventions can meaningfully reduce susceptibility to financial fraud.

Suggested Citation

Burke, Jeremy and Kieffer, Christine and Mottola, Gary R. and Perez-Arce, Francisco, Can Educational Interventions Reduce Susceptibility to Financial Fraud? (December 11, 2020). Available at SSRN: https://ssrn.com/abstract=3747165 or http://dx.doi.org/10.2139/ssrn.3747165

Jeremy Burke (Contact Author)

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

Christine Kieffer

Senior Director, FINRA Foundation's Investor Protection Campaign ( email )

Washington, DC
United States
202-728-6970 (Phone)

HOME PAGE: http://www.finrafoundation.org

Gary R. Mottola

Research Director FINRA Foundation ( email )

1735 K ST NW
Washington, DC 20006
United States

HOME PAGE: http://www.finrafoundation.org

Francisco Perez-Arce

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

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