Nearly half of scam victims lost money more than once in last two years  

NEW YORK (Aug. 1, 2024) — A new report based on a survey of 500 U.S. adults who lost money to at least one scam in the past two years finds 64% of respondents first discovered their loss by reviewing their own account statements. BioCatch – the global leader in digital fraud detection and financial crime prevention powered by behavioral biometric intelligence – partnered with leading fraud and cybersecurity advisory firm Javelin Strategy & Research to conduct the survey, which also found 49% of respondents identify as repeat victims, with 39% of those surveyed reporting a financial loss of more than $500.

The report, The Emotional Undercurrent of Scams also examines the psychological impact of falling victim to a scam and the actions victims take immediately following a scam. More than half (56%) of respondents admitted to losing trust in people in general and suffering emotional stress, while nearly one in five say their monetary loss disrupted their family life.

“One of the most surprising findings of the research is the perceived confidence most victims had in their ability to identify a scam compared to the reality that about half are repeat victims,” Javelin Strategy & Research Senior Fraud and Security Analyst Suzanne Sando said. “In addition, 43% of scam victims stated they were not aware of educational resources provided by their bank or credit union. This disparity presents a huge opportunity for financial institutions to rethink existing scam controls and customer education focused on building trust and improving the victim experience.”

Other key report findings:

• Scams are expensive for banks too: While not required by law to reimburse victims of authorized payment scams (where a victim is coerced into sending money to a fraudster under false pretenses), some U.S. financial institutions voluntarily compensate their customers who fall victim to a scam. More than two-thirds of survey respondents report receiving a full or partial refund for the money they lost to scammers. Financial institutions also bear significant operational expenses associated with investigating scam claims, as they navigate a tangled web of conflicting rules and regulations and an uncertain legislative future.

•  Scam victims want more protection: Respondents favored real-time interventions over payment delays and daily transfer limits. More than 80% of those surveyed wanted tools to allow them to verify the authenticity of an email or text from their bank, and pop-up warnings before a payment is finalized. In Australia, NAB’s payment alerts saved customers more than $100 million last year alone.

• Older victims lose more money: While millennials and Gen Z respondents lost an average of $1,396 and $1,622 respectively per scam, Gen X and Baby Boomers lost an average of $2,354 and $2,462.

• Losses very obvious very quickly: More than half of those surveyed say they realized they’d lost money to a scam within one day of falling victim.

• Consumers trust their banks: Nearly 70% of respondents reported their loss to their financial institution before telling anyone else, while just 26% first reached out to law enforcement. Among victims who did not report the crime, 65% stated they did not know where to go for help while 39% were embarrassed or ashamed.

“Every day, scammers work to improve the believability, reach, and sophistication of their scams,” BioCatch Chief Marketing Officer Jonathan Daly said. “The proliferation of readily available and increasingly simple-to-use artificial intelligence (AI) tools has only hastened this improvement. It is therefore critical for financial institutions to embrace new technologies and share data to not only keep up but also fight back against these international syndicates of scammers. As shown in the results of our recent 2024 AI, Fraud, and Financial Crime Survey2024 AI, Fraud, and Financial Crime Survey, many of the world’s leading financial institutions are combatting the onslaught of AI-powered financial crime with their own AI and machine-learning solutions, but prevention requires a continuous, adaptable approach.”

To access the complete results and analysis of the survey, download The Emotional Undercurrents of Scams, or register now for the live webinar on Aug. 6 at 11 a.m. Eastern.

About BioCatch:

BioCatch stands at the forefront of digital fraud detection, pioneering behavioral bintelligence grounded in advanced cognitive science and machine learning. BioCatch analyzes thousands of user interactions to support a digital banking environment where identity, trust, and ease coexist. Today, 32 of the world's largest 100 banks and 210 total financial institutions rely on BioCatch Connect™ to combat fraud, facilitate digital transformation, and grow customer relationships. BioCatch's Client Innovation Board – an industry-led initiative featuring American Express, Barclays, Citi Ventures, HSBC, and National Australia Bank – collaborates to pioneer creative and innovative ways to leverage customer relationships for fraud prevention. With more than a decade of data analysis, 92 registered patents, and unmatched expertise, BioCatch continues to lead innovation to address future challenges. For more information, please visit www.biocatch.com.