IDEAS home Printed from https://ideas.repec.org/p/fip/fedpwp/102536.html

Does Experience Matter? Past Fraud Experiences, Data Compromises, and Credit Market Behavior

Author

Abstract

We study how past experiences with fraud affect individuals’ likelihood of taking precautionary action in credit markets when faced with a new shock that raises their fraud risks. We focus on two kinds of past experiences with fraud: direct experience with fraud and a “near-miss” experience that increased fraud risk but did not directly lead to fraud. Using the 2017 Equifax data breach announcement, we show that individuals with either type of prior experience with fraud were more likely to take a precautionary action — freezing their credit report — than individuals with no prior experience with fraud. We also find that individuals with past direct experience with fraud were more likely to freeze their credit report than individuals who had a past near-miss experience. The individuals who froze their credit report had fewer total accounts and credit inquiries than those who did not, but this reduction in credit did not reduce their credit scores.

Suggested Citation

  • Nathan Blascak & Ying Lei Toh, 2026. "Does Experience Matter? Past Fraud Experiences, Data Compromises, and Credit Market Behavior," Working Papers 26-10, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:102536
    DOI: 10.21799/frbp.wp.2026.10
    Note: The Paper SUPERCEDES WP22-36
    as

    Download full text from publisher

    File URL: https://www.philadelphiafed.org/-/media/FRBP/Assets/working-papers/2026/wp26-10.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.21799/frbp.wp.2026.10?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Siegrist & Heinz Gutscher, 2008. "Natural Hazards and Motivation for Mitigation Behavior: People Cannot Predict the Affect Evoked by a Severe Flood," Risk Analysis, John Wiley & Sons, vol. 28(3), pages 771-778, June.
    2. Melissa L. Finucane & Joan L. Holup, 2006. "Risk as Value: Combining Affect and Analysis in Risk Judgments," Journal of Risk Research, Taylor & Francis Journals, vol. 9(2), pages 141-164, March.
    3. Robin L. Dillon & Catherine H. Tinsley & Matthew Cronin, 2011. "Why Near‐Miss Events Can Decrease an Individual's Protective Response to Hurricanes," Risk Analysis, John Wiley & Sons, vol. 31(3), pages 440-449, March.
    4. Margit Averdijk, 2011. "Reciprocal Effects of Victimization and Routine Activities," Journal of Quantitative Criminology, Springer, vol. 27(2), pages 125-149, June.
    5. Catherine H. Tinsley & Robin L. Dillon & Matthew A. Cronin, 2012. "How Near-Miss Events Amplify or Attenuate Risky Decision Making," Management Science, INFORMS, vol. 58(9), pages 1596-1613, September.
    6. Mariassunta Giannetti & Tracy Yue Wang, 2016. "Corporate Scandals and Household Stock Market Participation," Journal of Finance, American Finance Association, vol. 71(6), pages 2591-2636, December.
    7. Donghoon Lee & Wilbert Van der Klaauw, 2010. "An introduction to the FRBNY Consumer Credit Panel," Staff Reports 479, Federal Reserve Bank of New York.
    8. Umit G Gurun & Noah Stoffman & Scott E Yonker, 2018. "Trust Busting: The Effect of Fraud on Investor Behavior," The Review of Financial Studies, Society for Financial Studies, vol. 31(4), pages 1341-1376.
    9. Paul Slovic & Melissa L. Finucane & Ellen Peters & Donald G. MacGregor, 2004. "Risk as Analysis and Risk as Feelings: Some Thoughts about Affect, Reason, Risk, and Rationality," Risk Analysis, John Wiley & Sons, vol. 24(2), pages 311-322, April.
    10. David R. Holtgrave & Elke U. Weber, 1993. "Dimensions of Risk Perception for Financial and Health Risks," Risk Analysis, John Wiley & Sons, vol. 13(5), pages 553-558, October.
    11. Michael K. Lindell & Seong Nam Hwang, 2008. "Households' Perceived Personal Risk and Responses in a Multihazard Environment," Risk Analysis, John Wiley & Sons, vol. 28(2), pages 539-556, April.
    12. Mikhed, Vyacheslav & Vogan, Michael, 2018. "How data breaches affect consumer credit," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 192-207.
    13. Sasha Romanosky & Rahul Telang & Alessandro Acquisti, 2011. "Do data breach disclosure laws reduce identity theft?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(2), pages 256-286, March.
    14. Sumit Agarwal & Pulak Ghosh & Tianyue Ruan & Yunqi Zhang, 2024. "Transient Customer Response to Data Breaches of Their Information," Management Science, INFORMS, vol. 70(6), pages 4105-4114, June.
    15. Nathan Blascak & Julia S. Cheney & Robert M. Hunt & Vyacheslav Mikhed & Dubravka Ritter & Michael Vogan, 2025. "Financial Fraud Through the Lens of Extended Fraud Alerts," Working Papers 25-29, Federal Reserve Bank of Philadelphia.
    16. Michael K. Lindell & Ronald W. Perry, 2012. "The Protective Action Decision Model: Theoretical Modifications and Additional Evidence," Risk Analysis, John Wiley & Sons, vol. 32(4), pages 616-632, April.
    17. Michael Siegrist & Heinz Gutscher, 2006. "Flooding Risks: A Comparison of Lay People's Perceptions and Expert's Assessments in Switzerland," Risk Analysis, John Wiley & Sons, vol. 26(4), pages 971-979, August.
    Full references (including those not matched with items on IDEAS)

    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. Teun Terpstra, 2011. "Emotions, Trust, and Perceived Risk: Affective and Cognitive Routes to Flood Preparedness Behavior," Risk Analysis, John Wiley & Sons, vol. 31(10), pages 1658-1675, October.
    2. Alexa Tanner & Ryan Reynolds, 2020. "The near-miss of a tsunami and an emergency evacuation: the post-exposure effects on future emergency preparedness and evacuation intentions," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 104(2), pages 1679-1693, November.
    3. Ruud Zaalberg & Cees Midden & Anneloes Meijnders & Teddy McCalley, 2009. "Prevention, Adaptation, and Threat Denial: Flooding Experiences in the Netherlands," Risk Analysis, John Wiley & Sons, vol. 29(12), pages 1759-1778, December.
    4. Nicolás C. Bronfman & Pamela C. Cisternas & Paula B. Repetto & Javiera V. Castañeda & Eliana Guic, 2020. "Understanding the Relationship Between Direct Experience and Risk Perception of Natural Hazards," Risk Analysis, John Wiley & Sons, vol. 40(10), pages 2057-2070, October.
    5. Robin L. Dillon & Catherine H. Tinsley & William J. Burns, 2014. "Near‐Misses and Future Disaster Preparedness," Risk Analysis, John Wiley & Sons, vol. 34(10), pages 1907-1922, October.
    6. Wim Kellens & Teun Terpstra & Philippe De Maeyer, 2013. "Perception and Communication of Flood Risks: A Systematic Review of Empirical Research," Risk Analysis, John Wiley & Sons, vol. 33(1), pages 24-49, January.
    7. Lois Addo Agyepong & Xin Liang & Patrick Owusu Ansah, 2025. "Behavioral mechanism on flood risk response: a case study in Accra, Ghana," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 121(6), pages 6499-6523, April.
    8. Julie L. Demuth, 2018. "Explicating Experience: Development of a Valid Scale of Past Hazard Experience for Tornadoes," Risk Analysis, John Wiley & Sons, vol. 38(9), pages 1921-1943, September.
    9. Gina L. Tonn & Seth D. Guikema, 2018. "An Agent‐Based Model of Evolving Community Flood Risk," Risk Analysis, John Wiley & Sons, vol. 38(6), pages 1258-1278, June.
    10. Mengtian Zhao & Heather Rosoff & Richard S. John, 2019. "Media Disaster Reporting Effects on Public Risk Perception and Response to Escalating Tornado Warnings: A Natural Experiment," Risk Analysis, John Wiley & Sons, vol. 39(3), pages 535-552, March.
    11. Ewa Lechowska, 2018. "What determines flood risk perception? A review of factors of flood risk perception and relations between its basic elements," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 94(3), pages 1341-1366, December.
    12. Jantsje M. Mol & W. J. Wouter Botzen & Julia E. Blasch & Hans de Moel, 2020. "Insights into Flood Risk Misperceptions of Homeowners in the Dutch River Delta," Risk Analysis, John Wiley & Sons, vol. 40(7), pages 1450-1468, July.
    13. Laura K. Siebeneck & Thomas J. Cova, 2012. "Spatial and Temporal Variation in Evacuee Risk Perception Throughout the Evacuation and Return‐Entry Process," Risk Analysis, John Wiley & Sons, vol. 32(9), pages 1468-1480, September.
    14. Eoin O'Neill & Finbarr Brereton & Harutyun Shahumyan & J. Peter Clinch, 2016. "The Impact of Perceived Flood Exposure on Flood‐Risk Perception: The Role of Distance," Risk Analysis, John Wiley & Sons, vol. 36(11), pages 2158-2186, November.
    15. Wim Kellens & Ruud Zaalberg & Philippe De Maeyer, 2012. "The Informed Society: An Analysis of the Public's Information‐Seeking Behavior Regarding Coastal Flood Risks," Risk Analysis, John Wiley & Sons, vol. 32(8), pages 1369-1381, August.
    16. Joop de Boer & W. J. Wouter Botzen & Teun Terpstra, 2014. "Improving Flood Risk Communication by Focusing on Prevention‐Focused Motivation," Risk Analysis, John Wiley & Sons, vol. 34(2), pages 309-322, February.
    17. P. Bubeck & W. J. W. Botzen & J. C. J. H. Aerts, 2012. "A Review of Risk Perceptions and Other Factors that Influence Flood Mitigation Behavior," Risk Analysis, John Wiley & Sons, vol. 32(9), pages 1481-1495, September.
    18. Wim Kellens & Ruud Zaalberg & Tijs Neutens & Wouter Vanneuville & Philippe De Maeyer, 2011. "An Analysis of the Public Perception of Flood Risk on the Belgian Coast," Risk Analysis, John Wiley & Sons, vol. 31(7), pages 1055-1068, July.
    19. Xuemei Fang & Liang Cao & Luyi Zhang & Binbin Peng, 2023. "Risk perception and resistance behavior intention of residents living near chemical industry parks: an empirical analysis in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 115(2), pages 1655-1675, January.
    20. Elisabeth Maidl & David N. Bresch & Matthias Buchecker, 2021. "Social integration matters: factors influencing natural hazard risk preparedness—a survey of Swiss households," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 105(2), pages 1861-1890, January.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

    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:fip:fedpwp:102536. 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: Beth Paul (email available below). General contact details of provider: https://edirc.repec.org/data/frbphus.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.