IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_10239.html
   My bibliography  Save this paper

Can You Spot a Scam? Measuring and Improving Scam Identification Ability

Author

Listed:
  • Elif Kubilayⓡ
  • Eva Raiberⓡ
  • Lisa Spantigⓡ
  • Jana Cahlíkováⓡ
  • Lucy Kaariaⓡ
  • Lisa Spantig

Abstract

The recent expansion of digital financial products leads to severe consumer protection issues such as fraud and scams. As these potentially decrease trust in digital services, especially in developing countries, avoiding victimization has become an important policy objective. In an online experiment, we first investigate how well individuals in Kenya identify phone scams using a novel measure of scam identification ability. We then test the effectiveness of scam education, a commonly used approach by banks and institutions for fraud and scam prevention. We find that common tips on how to spot scams do not significantly improve individuals’ scam identification ability, i.e., the distinction of scams from genuine messages. This null effect is driven by an increase in correctly identified scams and a decrease in correctly identified genuine messages. We interpret this as an increase in caution. In addition, we find suggestive evidence that genuine messages which contain scam-like features are more likely to be misclassified, highlighting the importance of a careful design of official communication.

Suggested Citation

  • Elif Kubilayⓡ & Eva Raiberⓡ & Lisa Spantigⓡ & Jana Cahlíkováⓡ & Lucy Kaariaⓡ & Lisa Spantig, 2023. "Can You Spot a Scam? Measuring and Improving Scam Identification Ability," CESifo Working Paper Series 10239, CESifo.
    • Handle: RePEc:ces:ceswps:_10239
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp10239.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Seth Garz & Xavier Gine & Dean Karlan & Rafe Mazer & Caitlin Sanford & Jonathan Zinman, 2021. "Consumer Protection for Financial Inclusion in Low- and Middle-Income Countries: Bridging Regulator and Academic Perspectives," Annual Review of Financial Economics, Annual Reviews, vol. 13(1), pages 219-246, November.
    2. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    3. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Trusting the Stock Market," Journal of Finance, American Finance Association, vol. 63(6), pages 2557-2600, December.
    4. Christian Engels & Kamlesh Kumar & Dennis Philip, 2020. "Financial literacy and fraud detection," The European Journal of Finance, Taylor & Francis Journals, vol. 26(4-5), pages 420-442, March.
    5. He, Daixin & Lu, Fangwen & Yang, Jianan, 2023. "Impact of self- or social-regarding health messages: Experimental evidence based on antibiotics purchases," Journal of Development Economics, Elsevier, vol. 163(C).
    6. Jørgen Juel Andersen & Niels Johannesen & Bob Rijkers, 2022. "Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts," Journal of Political Economy, University of Chicago Press, vol. 130(2), pages 388-425.
    7. Brenner, Lukas & Meyll, Tobias & Stolper, Oscar & Walter, Andreas, 2020. "Consumer fraud victimization and financial well-being," Journal of Economic Psychology, Elsevier, vol. 76(C).
    8. Burke, Jeremy & Kieffer, Christine & Mottola, Gary & Perez-Arce, Francisco, 2022. "Can educational interventions reduce susceptibility to financial fraud?," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 250-266.
    9. Yan Chen & Iman YeckehZaare & Ark Fangzhou Zhang, 2018. "Real or bogus: Predicting susceptibility to phishing with economic experiments," PLOS ONE, Public Library of Science, vol. 13(6), pages 1-18, June.
    10. Dustan, Andrew & Hernandez-Agramonte, Juan Manuel & Maldonado, Stanislao, 2023. "Motivating bureaucrats with behavioral insights when state capacity is weak: Evidence from large-scale field experiments in Peru," Journal of Development Economics, Elsevier, vol. 160(C).
    11. Marguerite DeLiema & Martha Deevy & Annamaria Lusardi & Olivia S Mitchell & Deborah Carr, 2020. "Financial Fraud Among Older Americans: Evidence and Implications," The Journals of Gerontology: Series B, The Gerontological Society of America, vol. 75(4), pages 861-868.
    12. Jean Ensminger & Jetson Leder-Luis, 2022. "Detecting Fraud in Development Aid," NBER Working Papers 30768, National Bureau of Economic Research, Inc.
    13. Eric J Johnson & Stephan Meier & Olivier Toubia, 2019. "What’s the Catch? Suspicion of Bank Motives and Sluggish Refinancing," Review of Financial Studies, Society for Financial Studies, vol. 32(2), pages 467-495.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elif Kubilay & Eva Raiber & Lisa Spantig & Jana Cahlíková & Lucy Kaaria, 2023. "Financial fraud in developing countries: Common scam detection tips do not help distinguish scam from non-scam messages," ECONtribute Policy Brief Series 056, University of Bonn and University of Cologne, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elif Kubilay & Eva Raiber & Lisa Spantig & Jana Cahlíková & Lucy Kaaria, 2023. "Financial fraud in developing countries: Common scam detection tips do not help distinguish scam from non-scam messages," ECONtribute Policy Brief Series 056, University of Bonn and University of Cologne, Germany.
    2. Burke, Jeremy & Kieffer, Christine & Mottola, Gary & Perez-Arce, Francisco, 2022. "Can educational interventions reduce susceptibility to financial fraud?," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 250-266.
    3. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    4. Hagen, Johannes & Malisa, Amedeus, 2022. "Financial fraud and individual investment behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 593-626.
    5. David Aristei & Manuela Gallo, 2021. "Financial Knowledge, Confidence, and Sustainable Financial Behavior," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
    6. Wei, Li & Peng, Ming & Wu, Weixing, 2021. "Financial literacy and fraud detection——Evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 478-494.
    7. John Y. Campbell, 2016. "Restoring Rational Choice: The Challenge of Consumer Financial Regulation," American Economic Review, American Economic Association, vol. 106(5), pages 1-30, May.
    8. Cupák, Andrej & Fessler, Pirmin & Hsu, Joanne W. & Paradowski, Piotr R., 2022. "Investor confidence and high financial literacy jointly shape investments in risky assets," Economic Modelling, Elsevier, vol. 116(C).
    9. Dimitris Christelis & Dimitris Georgarakos & Tullio Jappelli & Maarten van Rooij, 2020. "Trust in the Central Bank and Inflation Expectations," International Journal of Central Banking, International Journal of Central Banking, vol. 16(6), pages 1-37, December.
    10. Bellofatto, Anthony & Broihanne, Marie-Hélène & D'Hondt, Catherine, 2019. "Appetite for information and trading behavior," LIDAM Discussion Papers LFIN 2019002, Université catholique de Louvain, Louvain Finance (LFIN).
    11. Asmare, Fissha & Giedraitis, Vincentas & Jaraitė, Jūratė & Kažukauskas, Andrius, 2023. "Energy-related financial literacy and retrofits of Soviet-era apartment buildings: The case of Lithuania," Energy Economics, Elsevier, vol. 120(C).
    12. Buss, Adrian & Vilkov, Grigory & Uppal, Raman, 2020. "Investor Sophistication and Portfolio Dynamics," CEPR Discussion Papers 15116, C.E.P.R. Discussion Papers.
    13. Kramer, Marc M., 2016. "Financial literacy, confidence and financial advice seeking," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 198-217.
    14. Francisco Gomes & Alexander Michaelides & Yuxin Zhang, 2022. "Tactical Target Date Funds," Management Science, INFORMS, vol. 68(4), pages 3047-3070, April.
    15. Stephen G Dimmock & Roy Kouwenberg & Olivia S Mitchell & Kim Peijnenburg, 2021. "Household Portfolio Underdiversification and Probability Weighting: Evidence from the Field," Review of Financial Studies, Society for Financial Studies, vol. 34(9), pages 4524-4563.
    16. Beckmann, Elisabeth & Mare, Davide Salvatore, 2017. "Formal and informal household savings: how does trust in financial institutions influence the choice of saving instruments?," MPRA Paper 81141, University Library of Munich, Germany.
    17. Gallego-Losada, Rocío & Montero-Navarro, Antonio & Rodríguez-Sánchez, José-Luis & González-Torres, Thais, 2022. "Retirement planning and financial literacy, at the crossroads. A bibliometric analysis," Finance Research Letters, Elsevier, vol. 44(C).
    18. Dimitris Christelis & Dimitris Georgarakos & Tullio Jappelli & Maarten van Rooij, 2020. "Trust in the Central Bank and Inflation Expectations," International Journal of Central Banking, International Journal of Central Banking, vol. 16(6), pages 1-37, December.
    19. Luc Arrondel, 2020. "Financial literacy and French behaviour on the stock market," Working Papers halshs-02505320, HAL.
    20. Amitabh Chandra & Courtney Coile & Corina Mommaerts, 2023. "What Can Economics Say about Alzheimer's Disease?," Journal of Economic Literature, American Economic Association, vol. 61(2), pages 428-470, June.

    More about this item

    Keywords

    consumer protection; consumer fraud; digital financial services; scam susceptibility; scam education; Kenya;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_10239. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.