Does how you "view the world" affect the likelihood of becoming a fraud victim?
The FINRA Investor Education Foundation attempted to address that issue in a recently released study, "Exposed to Scams: What Beliefs About the World Are Associated With Fraud Victimization?" (tinyurl.com/55tp8n48). Also involved in the study were researchers from the University of Minnesota, the University of Virginia, the BBB Institute for Marketplace Trust and the Good People Research Company, a research and advisory firm.
While there has been a lot of research aimed at the relationship between scam victimization and variables such as age, race, financial fragility and financial literacy, "little research has explored whether views about certain domains of our life experience ... are tied to victimization rates," according to the study.
Researchers sought to answer the following questions:
Can mental frames -- defined as "the inner narratives that guide how we think about, view and react to money, people, power, authority and aspects of social life" -- predict scam victimization?
If so, do mental frames predict scam victimization above and beyond other characteristics known to be related to scams?
In the study, an online survey in October 2023 generated 3,087 responses to a total of nine questions, with 19% of the respondents self-reporting scam victimization in the previous 12 months. The questions centered on the following fraud types: investment, lottery, phantom debt, employment, romance, advanced fee, government imposter and tech/account.
The researchers made use of four mental frames that "might influence or guide choices during scam encounters":
-- Compliance: The need to comply with requests, commands rules or regulations.
-- Opportunity: Beliefs about the ways people create, acquire and maintain wealth.
-- Intelligence: The ability to make sound decisions and grasp the deeper meaning of events.
-- Order: Do you believe in a "just world" or one in which there is no guarantee of justice or order?
Of the four mental frames, the study found that two -- opportunity and order -- were associated with scam victimization, even after controlling for demographic variables.
For opportunity, those who viewed the world from a zero-sum perspective -- "clear winners and losers" -- had a higher self-reported scam victimization rate than those who did not hold to the zero-sum perspective.
As for order, those who viewed the world as "unfair" had a higher self-reported scam victimization rate than those who believed in a "just" world. Interestingly, those who held a strong view that the world could be both fair and unfair had a lower self-reported scam victimization rate than those who had a weak belief that the world could be both fair and unfair.
The common denominator with opportunity and order? According to the study, the two views "appear to reflect more dichotomous thinking -- that is, all or nothing thinking with an overreliance on certainty":
"If a person ... prefers that the world operate in a more certain and predetermined way, they might be more willing to 'fill in the blanks' during a scam encounter to make something they want to be true, feel true."
"If they encounter a red flag or suspicious information ... they might ignore the red flag or explain it away rather than submit that the situation or decision might require additional analysis."
The study also contrasted dichotomous thinking with dialectical thinking -- described as "a more flexible form of thinking that can consider two opposing 'truths' simultaneously, prioritizes exploration over certainty, and can accept opposing perspectives.
"[B]eing comfortable with uncertainty, which is a hallmark of dialectical thinking, might be protective because it limits reliance on presuppositions and encourages people to fully examine a situation or an offer."
Researchers cautioned that there are important limitations for their findings, including that "to our knowledge, this is the first study to establish an empirical link between the way people view the world and fraud exploitation."
Yet the study offers a key point to contemplate, that "nuanced consideration is beneficial when evaluating persuasive information, and this can be particularly important when encountering a possible scam."
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