Fraud is virtually ubiquitous a new survey suggests, finding that 80% of Americans say they have been solicited by potentially fraudulent schemes.
The FINRA Investor Education Foundation published a new research report today, which says that over 80% of respondents to its survey of Americans aged 40 and older, say they have been solicited to participate in potentially fraudulent schemes. Moreover, it found that over 40% of those surveyed cannot identify some of the classic red flags of fraud.
The results are much higher than surveys carried out by Canadian regulators in the past, which have put the proportion of those who say they’ve been approached with a fraudulent investment opportunity at some point in their life at 27%, according to the most recent survey from the Canadian Securities Administrators (CSA), which was published in 2012.
While the CSA survey was based on respondents 18 years and older, even for older investors the percentage of suspected fraud is much lower. It found that 32% of investors aged 55 and older believe they have been approached by a fraud.
Where the Canadian results are more consistent with this new U.S. research is in terms of widespread vulnerability to fraud. It also found that 40% of Canadians fail a general investment knowledge test.
The FINRA Foundation’s survey also found that: 11% of respondents said they lost a significant amount of money in a fraud; and that those aged 65 and older are more likely to be targeted by fraudsters and more likely to lose money once targeted.
And, it found that under-reporting of fraud is a major concern. While 11% say they lost money in a likely fraudulent activity, only 4% admitted to being a victim of fraud when asked directly.
“When it comes to financial fraud, America is a nation at risk,” said FINRA Foundation president, Gerri Walsh. “Fraudsters are very effective at reaching and enticing vulnerable populations into turning over their money, and far too few Americans are able to detect likely fraudulent sales pitches.”