The Emotional Consequences of Fraud
Beyond the financial cost, emotional harm is the most common impact of fraud, and it can exert a heavy emotional toll on its victims. The European Commission reported that 79% of fraud victims suffered emotionally, 24% suffered financially and 6% suffered physically.1 In addition, according to the Financial Industry Regulatory Authority’s Investor Education Foundation, nearly two-thirds of victims reported experiencing at least one serious nonfinancial consequence of fraud, such as severe stress, anxiety, difficulty sleeping and depression.2
Although fraud does not involve physical violence, it does involve a form of psychological violation. In fact, the reactions of those who have been victimised may resemble those of other crime victims, including victims of violent crime. It is also worth mentioning that there are particularly violent types of fraud, such as sexual extorsion (including minors) for financial gain, which may cause severe trauma to the victims.3
This is important for anti-financial crime and fraud prevention professionals, to understand that fraud is not a victimless crime. Victims of fraud have not only been impacted financially but also abused emotionally. As a result, this article aims to explore the emotional impact of fraud among victims by analysing the possible consequences resulting from fraud. In addition, this article cites some testimonies from actual victims. The second part provides recommendations on how FIs can respond to assist their customers and mitigate the emotional impact of fraud and its devastating impact on people.
Stress
Stress is reported as one of the most common emotional effects among fraud victims. The impact of fraud causes stress to the individuals who experience scams as well as their relatives and friends. Feeling stress can exacerbate when victims of fraud are, for example, individuals who hold positions of responsibility, such as business owners. In some instances, the stress stemming from becoming a victim of fraud can be far-reaching and completely devastating for the victims. In this regard, a 91-year-old Thai monk, Pra Chuen Seesuay (aka Luang Ta), died shortly after being a victim of a scam due to significant stress. According to an official from Wat Pak Nam temple in Nonthaburi, he “suffered several seizures and ultimately ‘died from stress’ shortly after falling victim to a scam.”4
Loss of Sleep
The impact of fraud may result in physical health problems such as loss of sleep. Dr Chew Yat Peng, the principal counselor of O'Joy, stated that scams might cause victims to experience difficulty sleeping or have nightmares. A principal clinical psychologist, Dr Annabelle Chow, reported that her client Grace (pseudonym), experienced loss of sleep resulting from a romance scam.5
“More than half a year on, Grace is still rebuilding her self-confidence. As she wasn’t sleeping well and was in a low mood, this affected her ability to retain information and she made mistakes at work.”6
Shame and Embarrassment
The feelings of shame and embarrassment may be linked to the victims’ perceptions of responsibility and the societal prejudice against them, that they are partly to blame. Fraud victims feel ashamed or embarrassed and do not want anyone to know about their loss and the fact that they have fallen for a scam. Consequently, shame and embarrassment may prevent some victims from reporting to authorities or FIs, including their partners or relatives, which isolates them from any kind of support. Oscar Newman described how he felt ashamed for having fallen for an authorized push payment scam as well as his concern that his bank would blame him.7
“I was overwhelmed with shame at being taken in, tired, scared and very, very broke, and I felt I was waiting for the bank to pass judgment on how silly I was.”8
The feeling of shame and embarrassment can also result from being made “celebrities,” namely when victims find themselves in the media spotlight. The impact of fraud may damage relationships in various ways, such as concealment and break up resulting from shame and embarrassment.
Loss of Trust In Others
The chief psychologist at the Ministry of Home Affairs, Dr Majeed Khader, reported that “when people become scam victims, they tend to lose trust in those around them,”9 which may isolate them further. This is particularly the case for romance scams, as the perpetrators exploit the victims’ trust. Zainab (pseudonym), for example, described how being a victim of a romance scam affected her ability to trust others.10
“It has completely destroyed my confidence. It’s going to take a very long time for me to trust anybody ever again.”11
Loss of Self-confidence or Self-esteem
Loss of self-confidence or self-esteem among fraud victims stems from the public’s perception that victims are partly to blame or that they are gullible and greedy. In addition, victims’ own feelings of responsibility, shame, embarrassment and guilt may result in a loss of self-confidence or self-esteem. Consequently, they may believe that they do not deserve support, such as in the case of Mary Barker, who fell victim to social engineering.12
“It is hard to distance myself from what I think other people might think about me, and how the responses from the banks have made me feel,” she says. “My wedding can only go ahead thanks to the generosity of my family but the scam has caused me to question whether I deserve a wedding party, or whether I should just cancel the whole thing, as a sort of ‘punishment’ for what has happened.”13
Depression or Anxiety
According to professor Matthew Mimiaga of The University of California (UCLA), “Scam victims often suffer from a decrease in life satisfaction and are likely to have higher levels of anxiety and lower levels of happiness.”14
“Their lingering anxiety has real, physical side effects including feeling restless, wound-up or on edge,” Mimiaga says. “It could lead to people being easily fatigued, having difficulty concentrating, or even having headaches and other unexplained pains.”15
Anger
It is possible to distinguish two types of victims experiencing anger: those who can control themselves and those who tend to be unable to hold back. The latter includes victims who may express a desire to take revenge or physically hurt the perpetrators. The victims’ desire to take revenge may result in negative actions. For example, Anthony, who was a victim of a pig butchering scam in the form of a fake liquidity mining pool, reported spending months trying to track down his scammers as well as being “stuck between moving on and getting revenge.”16
Denial
Victims of fraud can be in denial, which is a human defence mechanism consisting of ignoring the reality of a situation and denying its consequences to cope with distressing feelings. Usually, fraud victims refuse to talk about the problem, find ways to justify their behaviour, blame others or outside forces responsible for the problem, persist in their behaviour despite the negative consequences or avoid thinking or talking about the problem. This denial among fraud victims can be attributed to the fact that perpetrators can go to great lengths to groom their victims, especially when it comes to scams involving feelings as the perpetrators fill fundamental needs for the victims.
In Sharon Turner’s case, who was a victim of a romance scam, her daughter noticed the scam and confronted her. However, she was in denial. She also described her behaviour as similar to a gambling addiction as she persisted in her behaviour by continuing to send money to her perpetrator despite the negative consequences and even borrowed money from family relatives and friends.17
“I was in denial about how much money I’d given him, but in the end it was close to £200,000 [$244,645]. I was mortified. When it finally hit me, I had suicidal thoughts.”18
Guilt
The feeling of guilt describes a persistent belief that the victims have done something wrong, which can subsequently lead to other adverse emotions such as shame and embarrassment, stress, loss of sleep, depression or anxiety and even suicide. Perpetrators of fraud can use the victims’ feelings of guilt to make them comply with their requests because the victims can feel that they are responsible for the mistakes they committed and, as a result, have no choice but to comply. It is worth highlighting that the feeling of guilt may be exacerbated when the victims involve their relatives in the scam by borrowing money from them, for example. This feeling of guilt is also not limited to the victims themselves but may also affect the victims’ relatives and friends. For example, the father of a ten-year-old boy felt guilty after his son was a victim of a sextortion scheme and for failing his parental duty to protect his son.19
“It sent me down a mental spiral with several suicide attempts from the guilt.”20
Fear
The feeling of fear may arise when the perpetrators of fraud use threats of violence or other forms of intimidation, such as threatening victims or their relatives’ life or raising the prospect of legal action. Fear is a natural, powerful, and primitive human emotion and some fraud victims feel they have no choice but to comply with the perpetrators’ requests. In this regard, perpetrators exploit fear to make their victims react to a situation of urgency. The use of threats by fraudsters commonly occurs when the scam ends. In some instances, fear may be so overwhelming that fraud victims commit suicide. For example, 17-year-old male student Ryan Last committed suicide as a result of a sexual extortion scheme. The perpetrator posed as a young girl to obtain compromising material from him. The perpetrator also demanded money under the threat of sharing the material with his family and friends. Due to the continued pressure, the teenager ultimately committed suicide.21
“He really, truly thought at that time that there wasn’t a way to get by if those pictures were actually posted online,” [her mother] Pauline said. “His note showed he was absolutely terrified. No child should have to be that scared.”22
Suicide
A fraction of fraud victims may have suicidal tendencies and contemplate committing suicide. Some victims are so devastated by the fraud that they commit suicide. Kwek Boon Siang, principal psychologist at the crime, investigation and forensic psychology branch of the Home Team Behavioral Sciences Centre, reported that “The family members and loved ones of scam victims are often greatly affected. In some cases, victims do desperate things, like turning to suicide and hurting themselves, and their loved ones have to live with the consequences.”23 According to the City of London Police Commander Nik Adams, there are 300 victims of fraud at risk of suicide and self-harm every year in the U.K.24 One of the most notable cases is the Madoff investment scandal, which led to the suicides of individuals who invested significant amounts of money such as client’s funds and life savings.25 It is worth recalling that the loss of money is not necessarily the sole or primary reason why fraud victims commit suicide. In addition, fraud victims who commit suicide come from all walks of life. In Angela Stancik’s testimony26 delivered at the U.S. Senate Special Committee on Aging, she recounts how her 82-year-old grandmother committed suicide as a result of an advance-fee scheme.27
“It pains me to talk about my grandmother’s horrific death because she chose to take her own life. It is extremely hard to imagine a loved one committing suicide, but she did.”28
Secondary Victimisation
Fraud does not cease when the fraud perpetrators have received the proceeds of their crime. Potential secondary consequences can develop later and hurt victims, exposing them to further victimisation. Fraud often involves or results in stealing victims’ personal information, which fraudsters can use to commit other crimes. In this regard, it is worth mentioning the case of Harold, a victim of fraud who participated in a study conducted by the Centre for Counter Fraud Studies (CCFS) at the University of Portsmouth.29 The emotional impact of fraud on this individual’s life is one of the most devastating impacts discovered in CCFS’ research. The report reveals that Harold was a credit card fraud victim who, several years after having been a victim of a scam, was arrested by police detectives and got his computer seized. Harold was accused and arrested on suspicion of downloading child sexual abuse material. In fact, Harold was falsely accused and subsequently cleared when the police wrote to him and stated that his bail was cancelled. Despite his innocence, the arrest and the severity of the accusation had a devastating impact and irreversibly changed his life.
“It’s certainly altered my life and personality irrevocably, because I’m no longer the completely open, frank person, naïve person that I was lucky enough to be for the first, 55 years of my life, I’m quite a different person now. I’m much more cagey as witnessed by my insistence on being anonymous.”30
Conclusion
It is estimated that the emotional cost of fraud on the victims’ well-being amounts to £9.3 billion ($7.6 billion) a year in the U.K. only.31 When fraud occurs, victims are often left to cope with a wide range of emotions as well as financial loss and in some instances compromised identities. It is important to highlight that anyone can be a victim of fraud. In fact, fraud victims come from all socio-economic backgrounds and have all education levels. In other words, there is no single profile of a fraud victim and there is no level of intelligence that may prevent someone from being victimised.
Jonathan Dupont, FIU investigator and subject-matter expert on cryptocurrency, human trafficking and crimes against children, Lithuania, jonathandupont@protonmail.com,
“Survey on ‘Scams and Fraud Experienced by Consumers’,” European Commission, January 2020, https://commission.europa.eu/system/files/2020-01/survey_on_scams_and_fraud_experienced_by_consumers_-_final_report.pdf
“Non-Traditional Costs of Financial Fraud,” FINRA Foundation, 2015: https://www.finrafoundation.org/files/non-traditional-costs-financial-fraud
“Sextortion Crimes on the Increase: Talk to Your Kids Now,” U.S. Department of Justice, 20 December 2022, https://www.justice.gov/usao-wdpa/pr/sextortion-crimes-increase-talk-your-kids-now
“Elderly Thai monk ‘dies from stress’ after falling victim to scam,” Thaiger, 1 February 2023, https://thethaiger.com/news/national/elderly-thai-monk-dies-from-stress-after-falling-victim-to-scam
“Scam victims don't just get hit in the wallet, their mental health also suffers,” The Straits Times, 20 February 2022, https://www.straitstimes.com/singapore/courts-crime/scam-victims-dont-just-get-hit-in-the-wallet-their-mental-health-also-suffers
Ibid.
“Haunted by shame: victims of bank transfer scams tell of lasting trauma,” The Guardian, 17 April 2021, https://www.theguardian.com/money/2021/apr/17/bank-transfer-scams-fraud-victims
Ibid.
"Impact of scam on victims goes beyond money as they lose trust in people, become stressed: Panel speakers," The Strait Times, 18 January 2023, https://www.straitstimes.com/singapore/impact-of-scam-on-victims-goes-beyond-money-as-they-lose-trust-in-people-become-stressed-panel-speakers
“Romance fraud victim: ‘I lost £6k, I couldn’t pay my rent. I’ve lost all confidence in people’,” inews.co.uk, 14 February 2023, https://inews.co.uk/inews-lifestyle/money/saving-and-banking/romance-fraud-couldnt-pay-rent-lose-confidence-people-2147294
Ibid.
“Online fraud: victim blaming and the emotional price of falling for a scam,” The Guardian, 20 February 2022, https://www.theguardian.com/money/2022/feb/20/online-victim-blaming-and-the-emotional-price-of-falling-for-a-scam
Ibid.
“The nonstop scam economy is costing us more than just money,” The Washington Post, 13 July , 2022, https://www.washingtonpost.com/technology/2022/07/13/scam-fraud-fatigue/
Ibid.
“Anthony messaged with 'Michelle' every day for months. He was being drained of his savings in an elaborate 'pig butchering' scam,” ABC News, 6 November 2022, https://www.abc.net.au/news/2022-11-07/pig-butchering-crypto-romance-investment-scams/101606644
“Woman who lost £200k as romance scammers steal £3m in Staffordshire,” StokeonTrentLive, 14 February 2023, https://www.stokesentinel.co.uk/news/stoke-on-trent-news/woman-who-lost-200k-romance-8143953
Ibid.
“Perth dad reveals anguish after 10yo son becomes victim of WhatsApp sex scam,” New Zealand Media and Entertainment, 12 February 2023, https://www.nzherald.co.nz/world/perth-dad-reveals-anguish-after-10yo-son-becomes-victim-of-whatsapp-sex-scam/6X2FUUGMCFDG5J6UUEXO7I22TU/
Ibid.
“A 17-year-old boy died by suicide hours after being scammed. The FBI says it’s part of a troubling increase in ‘sextortion’ cases,” CNN, 23 May 23 2022, https://edition.cnn.com/2022/05/20/us/ryan-last-suicide-sextortion-california/index.html
Ibid.
“The painful cost of scams: Suicide and self-harm,” The Straits Times, 14 January 2023, https://www.straitstimes.com/singapore/the-painful-cost-of-scams-suicide-and-self-harm
“Police will treat fraud cases the same as terrorism in bid to crackdown on growing crime,” MailOnline, 6 February 2023, https://www.dailymail.co.uk/news/article-11716669/Police-treat-fraud-cases-terrorism-bid-crackdown-growing-crime.html
“Madoff Investor’s Suicide Leaves Questions,” The New York Times, 1 January 2009, https://www.nytimes.com/2009/01/02/business/02madoff.html; “Banking crisis killed my father,” BBC News, 12 February 2009, http://news.bbc.co.uk/2/hi/uk_news/7886894.stm; “Investor burned by Madoff leaps to death from luxury hotel balcony,” New York Post, 27 March 2017, https://nypost.com/2017/03/27/man-leaps-to-death-from-sofitel-hotel/
“Testimony of Angela Stancik before the United States Senate Special Committee on Aging, ‘Combatting Robocall Fraud: Using Telecom Advances and Law Enforcement to Stop Scammers and Protect Seniors’,” 17 July 2019, https://www.aging.senate.gov/imo/media/doc/SCA_Stancik_7_17_19.pdf
“How Criminals Steal $37 Billion a Year from America’s Elderly,” Bloomberg, 3 May 2018, https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
Ibid.
Mark Button, Chris Lewis and Jacki Tapley, A better deal for fraud victims: research into victims’ needs and experiences. National Fraud Authority, 2009, https://researchportal.port.ac.uk/en/publications/a-better-deal-for-fraud-victims-research-into-victims-needs-and-e
Ibid.
“Scams impact on victims' wellbeing amounts to £9.3bn,” Which?, 18 October 2021, https://www.which.co.uk/news/article/scams-impact-on-victims-costs-9-3-billion-a-year-a5mNq6i9316q