Every year, billions of dollars are lost due to financial fraud. As a result, individual victims may have an enormous financial burden. In addition to losing substantial sources of income and wealth, victims frequently can spend months, if not years, navigating a minefield of reporting procedures and negotiating with financial institutions only to deter the fraud from continuing.
Following all of that, financial recovery may be at best limited. Advocates can support victims in managing their economic recovery expectations. Victims must realize that, while recuperating lost assets may be impossible, they still can reclaim control of their lives and financial futures, putting an end to the trauma of being a victim.
Individual losses might include:
Regardless of the type of fraud - Identity Theft, Investment Fraud, Mortgage and Lending Fraud, Mass Marketing and Online Fraud - they seem to have the same detrimental effect on fraud victims.
Financial fraud could happen to anybody. According to research, victims come from various educational levels and socioeconomic backgrounds. There is no one description of a victim of financial fraud, and no amount of intellect can safeguard a person from being a victim.
Some forms of financial fraud are more common among specific categories of individuals. Victims of investment fraud, for example, are often male, financially knowledgeable, college-educated, and nearing or in retirement. Lottery fraud victims are more likely to be single, older, and have lower levels of education and wealth.
It is critical to recognize that victims have been emotionally as well as financially exploited. As a result, they frequently feel forsaken and resent themselves, their skills, and their capabilities for being misled.
Financial predators are skillful con artists and fraudsters. They have keen insight into human behavior and how to exploit others. In addition, financial fraud offenders may be family members of victims in some circumstances, which can exacerbate victims' emotional trauma. Recognizing that everyone is vulnerable to fraud helps to alleviate the shame and guilt that they are experiencing.
Financial fraud may have a significant emotional impact on victims. Victims respond similarly as if they were other crime victims, including victims of violent crime. Understanding such emotions is critical for emotional healing from financial exploitation.
According to FINRA Foundation study, roughly two-thirds of fraud victims suffer at least one significant emotional repercussion.
Fraud victims often suffer from:
Among those targeted are:
In short, the repercussions of financial fraud extend far beyond financial loss to encompass emotional and mental health. Financial fraud, like burglary, is a crime of opportunity. No one deserves to be a victim of fraud. The perpetrator is to blame. Advocates can aid victims by linking them to emotional and mental health resources.
If you have been a victim of fraud, you may be more likely to be targeted for future scams. Because your information or identity may have been compromised, be suspicious of loan modification schemes that ask you to pay in advance, as well as offers that guarantee results or claim to be "no money down."
Marc has 36 years in financial services and 6 years in teaching.
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