Consumer Experience of Mistreatment and Fraud in Financial Services: Implications from an Integrative Consumer Vulnerability Framework

This study utilizes the National Financial Well-Being Survey (NFWS) from the Consumer Financial Protection Bureau (CFPB) to investigate the profiles of American consumers who experience mistreatment or a type of fraud in financial services (compromised accounts). An integrative consumer vulnerability framework was used as the theoretical framework to examine how disadvantaged consumer characteristics and vulnerable consumer characteristics are associated with mistreatment and compromised accounts. Consumers in vulnerable states, due to low financial capability, cognitive decline, material hardships, financial shocks, and more exposure to various financial services, were more likely to report experiencing mistreatment and having their financial accounts compromised. Consumers from higher socio-economic status were more likely to have been victims of mistreatment and compromised accounts in financial services. These findings offer implications for consumer financial education and protection.

The Shackles of Fear: A Moderated Mediation Model of How Fear of Aging May Increase Older Adults' Vulnerability to Fraud

Objectives: Older adults are disproportionately vulnerable to frauds of many kinds, and fear of aging has been conjectured to be a primary factor in older adults' vulnerability to fraud; however, no study has examined how and when fear of aging is associated with older adults' vulnerability to fraud.Methods: In this cross-sectional study, a sample of 251 Chinese older adults (M = 68.1, SD = 6.43) completed measures regarding fear of aging, intolerance of uncertainty, self-control, and vulnerability to fraud.Results: The results revealed that intolerance of uncertainty partially mediated the association between fear of aging and vulnerability to fraud. This indirect effect of fear of aging on vulnerability to fraud was only significant for older adults with lower levels of self-control.Conclusions: The association between fear of aging and older adults' vulnerability to fraud through intolerance of uncertainty varies as a function of self-control.Clinical implications: Clinicians may focus on reducing the fear of aging, decreasing intolerance of uncertainty, and enhancing self-control as promising pathways to develop effective interventions and outreach strategies aimed at protecting older adults from fraud.

Perceived Types, Causes, and Consequences of Financial Exploitation: Narratives From Older Adults

OBJECTIVES

The goal of this study was to investigate the perception of financial exploitation and its causes and consequences by older adults who have firsthand experience of being exploited.

METHOD

Thirty-one cognitively healthy older adult participants aged 50 or older were drawn from the Finance, Cognition, and Health in Elders Study. In-depth, one-on-one interviews were conducted. Interview transcripts were analyzed using an iterative, data-driven, thematic coding scheme and emergent themes were summarized.

RESULTS

Categories of financial exploitation included (a) investment fraud, (b) wage theft/money owed, (c) consumer fraud, (d) imposter schemes, and (e) manipulation by a trusted person. Themes emerged around perceived causes: (a) element of trust, (b) promise of financial security, (c) lack of experience or awareness, (d) decision-making, and (e) interpersonal dynamics. Perceived consequences included negative and positive impacts around (a) finances, (b) financial/consumer behaviors (c) relationships and trust, (d) emotional impact, and (e) future outlook.

DISCUSSION

These narratives provide important insights into perceived financial exploitation experiences.

[Financial fraud and health: a qualitative approach]

During the economic crisis, developed countries have experienced financial fraud, with effects on the physical and mental health of the people affected, and on social domains. Based on the theoretical framework in literature reviews and in quantitative studies, this paper aims to obtain evidence on the effects of financial fraud on health and on the family and social environments of those affected. An intentional sample of 32 people affected by abusive and multi-currency mortgages, preferred and swap stock in Madrid was approached. In-depth interviews were conducted, and the resulting data was analysed using content analysis. Fraud-affected individuals had conditions of age, sex, educational level and occupations that possibly allowed them to accumulate economic resources throughout the course of their lives and, predictably in many cases, to take out fraudulent financial products, based on trust in the financial institutions. Financial fraud has led to the emergence of various processes of anomia and adverse health effects. The consequences on health were physical ailments (symptoms and diseases in various systems and parts of the body) and mental disorders (anxiety, depression, suicidal ideation), all affecting lifestyles, behaviour and personal and social relationships, both in affected individuals and their families. The increase in the use of medical drugs and health services serves as a final corollary to the imbalances on the affected people's health. Individuals and the Spanish society demand public health policy measures to mitigate the effects on health and the recovery of their confidence in the banking and political system.

Impact of self-reported bank fraud on self-rated health, comorbidity and pain

OBJECTIVES

As reported in other high-income countries, around the 2008 Great Recession the Spanish banking sector engaged abusive practices that satisfy the definition of fraud. Our objective is to examine the association between self-reported bank fraud and physical health, using a gender perspective.

METHODS

With data from the 2017 Madrid Health Survey, we examined the association between the economic impact of fraud and poor self-rated health (SRH), comorbidity and pain (N = 4425). Interactions of time since fraud and sex with economic impact were tested by Poisson regression models with robust variance.

RESULTS

In total, 11% of adults in Madrid reported bank fraud since 2006. Among men, those who experienced frauds with severe economic impact were more likely to report adverse health than those who did not experience fraud (PR comorbidity: 1.46; PR pain conditions: 2.17). Among men time elapsed since fraud strengthened the association between severe economic impact and poor SRH (p = 0.022; p = 0.006, respectively). Among women, associations did not reach statistical significance.

CONCLUSIONS

Bank frauds are an emerging phenomenon which is likely to damage public health. Stricter regulation to protect people from fraudulent bank practices is needed.

Financial fraud and health: the case of Spain

OBJECTIVE

To examine whether financial fraud is associated with poor health sleeping problems and poor quality of life.

METHODS

Pilot study (n=188) conducted in 2015-2016 in Madrid and León (Spain) by recruiting subjects affected by two types of fraud (preferred shares and foreign currency mortgages) using venue-based sampling. Information on the monetary value of each case of fraud; the dates when subjects became aware of being swindled, lodged legal claim and received financial compensation were collected. Inter-group comparisons of the prevalence of poor physical and mental health, sleep and quality of life were carried according to type of fraud and the 2011-2012 National Health Survey.

RESULTS

In this conventional sample, victims of financial fraud had poorer health, more mental health and sleeping problems, and poorer quality of life than comparable populations of a similar age. Those who had received financial compensation for preferred share losses had better health and quality of life than those who had not been compensated and those who had taken out foreign currency mortgages.

CONCLUSION

The results suggest that financial fraud is detrimental to health. Further research should examine the mechanisms through which financial fraud impacts health. If our results are confirmed psychological and medical care should be provided, in addition to financial compensation.