Why do consumers fall for scams?

Well, amongst others, consumers only report 7% of all online frauds

The scam season is approaching. While consumers are preparing to shop massively online, so are scammers rapping up their websites. The Ecommerce Foundation surveyed 5.200 consumers from 42 countries to better understand who is being scammed and why.

Consumers receive 55 scams a year

72% of the participants (think) they have been approached by at least one scammer in the last year. The number of scam approaches has remained stable in comparison with the year before. 23% of the respondents even noted that they have been approached far less. Still, the average consumer is approached 55 times a year by a scammer.








Figure 1: In the last year, how many times were you approached for which type of scam?


The most popular scams are attempts to gain personal information (15%), unexpected winnings (15%) and scams related to buying and selling online (14%).  

The number of scam attempts differs strongly per country. Nigeria and South Africa are suffering the most.  82% of the participants from these countries received at least one scam attempt last year. Countries that followed are the United States (81%), Australia and Canada (79%) and the UK (72%). In comparison ‘only’ 59% Spanish and 55% Indian participants reported receiving a scam.

 

Super confident but 73% falls for scam

Most consumers feel (very) confident (75%) that they can recognize scams. People with a bachelor (79%) or master’s degree (78%) feel overall more confident than people with no education (66%) or little education (55%)              









Figure 2: % of people who have fallen for a scam / education level.


However, of those who reported having been approached for a scam, 73% state to have fallen for a scam at least once last year. 46% lost money while 20% lost personal details. 17% was drawn into the scam but did not suffer any losses.

Remarkably people with higher education (PhD, Master, Bachelor) report to have been scammed more than people with less education. 53% of those with a PhD reported to have lost money or something else to a scammer. Only 34% with no schooling reported being scammed.

“I am a researcher; I do not fall for scams.”  The opposite is however true. Higher educated get scammed more.


The amount of experience with shopping online also has a strong influence on the vulnerability towards being scammed. Those who have no or very little online shopping experience fall for scams more easily (51%) than those who shop on a weekly or monthly basis (25%).

In the end, our ability to learn seems minimal. Consumers who got scammed are only slightly less confident that they can identify the next scam than those who never got scammed before. 


Why we fall for scams?

While the participants believe that they are very good at identifying scams. The reality shows otherwise. 50% of those who have fallen for a scam did not identify the scam until it was too late. 30% also named a lack of knowledge as a reason for falling for a scam.

We are, however, also gamblers. 21% stated going for the lure of money or even suspected a scam but choose to risk it (21%).










Figure 3: Which were the main causes you fell for a scam?


Another reason named frequently is that consumers do not do enough research before they buy from a new online store. Not reading the small print, not checking reviews and simply handling on impulse were named frequently.

Especially people 65+ years and older reported not able to identify the scam until it was too late. Young people also are more willing to take a risk, suspecting a scam, but still going for it. The same applies to people with an annual income higher than $ 50.000.

“I thought it was Legit because it was on Facebook ad.”


Finally, recognizing a scam is also reported to be difficult. Participants see ads on Facebook, Pinterest, and Google as legit. Scammers are increasingly professional making it even difficult for experts to recognized forged emails from PayPal and DHL and fake company papers and IDs.


The impact of scams

The average amount lost amongst American participants is $ 1000. While most people lose relatively small amounts, the number of Investment and Romantic scams increase the average significantly. Some of the participants claimed to have lost up to several hundreds of thousands of dollars in cryptocurrency schemes.

Men (40%) are more prone to losing money than women (32%). If American men lose money they also lose nearly 3 times as much as American women.

The impact of falling for a scam is significant. People from low-income countries like Nigeria, Columbia, and Kenya lose money the most frequent. Followed by Australia and to a lesser extent Brazil, Italy, Mexico, and Spain.

The emotional and social impact may, however, be even be more significant than the money lost. People who got scammed state they lost trust in themselves and other people. Scams lead to major family crises and even broken marriages.

“The scam broke up my marriage.”

People are also fighting back. Trying to scam the criminal, revealing his identity or just having a good laugh by frustrating the scammer. 


How to fight scams?

40% of those who were approached by a scammer never reported any offense. While on average participants received 55 scams annually, 18% reported only one, 11% - 2 scams and 6% - 3 scams. In total, only 7% of all scam approaches are reported. 


Figure 4: Which of the following reasons describe why you didn’t report the scam(s)?