Unit 7: economic crimes in the modern society text 1. Consumer fraud. Victims of fraud

Victim Demographics

Ethical views define broad standards of behavior which help to shape the rules we use to live together in the society. Fairness and freedom are two ethical views that are violated by fraud in the environment of dishonesty, greed and laziness.

Just as there is no typical profile for swindlers, neither is there one for their victims. Virtually anyone can be a victim of fraudulent crimes.

Movie actors, athletes, successful business executives, political leaders, internationally famous economists have all fallen victims to the investment fraud.

Certainly victims of high-yield investment frauds may possess a level of greed which exceeds their caution as well as a willingness to believe what they want to believe. However, not all fraud victims are greedy, risk-taking, self-deceptive individuals looking to make a quick dollar. Not all fraud victims are naive, uneducated, or elderly.

Victims of fraud come from a variety of racial, age, gender, religious, socioeconomic, and educational backgrounds. And smart perpetrators take into account these differences.

Some swindlers deliberately seek out families that may have limited means or financial difficulties, figuring such persons may be particularly receptive to a proposal that offers fast and large profits. A favorite trap is that small investors can become rich if they learn and employ the investment strategies used by wealthy persons.

Young, well-educated people are the most likely to fall for swindlers but old people are more likely to report these economic crimes. According to the National Consumers League senior citizens often fall prey to telemarketing frauds, but people in their 30s and 40s often complain that they have been defrauded over the Internet.

For example, fraudulent telemarketers often target the elderly as potential victims, not because they are greedy, but because they are more likely to:

• have money, property, savings, and investments;

• be at home to receive phone solicitations;

• remain on the phone longer to hear fraudulent arguments (due to loneliness).

Young educated adults may be targeted because of:

• lack of maturity and experience that would help them recognize fraudulent talks,

• desire and social pressure to increase their standard of living quickly,

• lack of information about financial investments.

Other victims are targeted because of certain personality or character traits that may increase their risk for fraud victimization. They include:

• compassion,

• respect for authority figures,

• unsuspicious natures.

Financial Effect of Fraud

The National Institute of Justice indicated the Financial effect of fraud on their respondents. The results: 85 percent lost money or property; 20 percent suffered financially or had personal credit problems; 14 percent had emotional problems directly related to their victimization; and 14 percent of fraud victims lost time from work.

Young people who are ripped off by swindlers are fortunate to the extent that they have the opportunity to pick themselves up and restore some or all of their losses through new earnings. If you are elderly, disabled, or on a fixed income and you lack opportunities to recover your losses you may face additional trauma. That is why the financial effect of fraud is great.

Psychological Effect of Fraud

Fraud crime is a personal violation. Although there is no serious physical injury many victims of con-men speak of the betrayal as the psychological equivalent of rape. Some victims find it helpful to seek the services of counseling professional, clergy member, or an advocacy organization, but the most suffer alone.

Your trust in your own judgment, and your trust in others, is often shattered. You may have hesitated to tell family members, friends, or colleagues about your victimization for fear of criticism. As a result, you have a deep depression.

Fraud often evokes the following feelings or emotional reactions among its victims:

• self-doubt, shock, disbelief;

• societal condemnation and indifference (the attitude that victims of fraud deserve what they get as a result of their own greed and stupidity);

• isolation (when victims suffer their losses in silence rather than risking alienation and blame from family members, friends, and colleagues);

• anger, resentment, and a sense of betrayal toward the offender for taking advantage of you;

• frustration with criminal justice professionals;

• shame, embarrassment, and guilt if you feel that you contributed to your own or others' victimization;

• fear for your financial security;

• increased concern about your personal safety.

The tangible cost of fraud crime is easily translated into dollar amounts. Less easily measured, and perhaps the most exacting cost of all, is the severe emotional impact of fraud crime on many of its victims. Such emotional harm can be caused by the victim's loss of the following:

• financial security,

• family home,

• business,

• inheritance,

• retirement savings or children's educational funds,

• professional or personal credibility.

Although victim service providers and mental health practitioners have focused on the devastating effects of violent crime.

Some of the same physiological and long-term emotional effects experienced by victims of violent crimes are also experienced by fraud victims such as:

• feeling of terror or helplessness,

• rapid heart rate,

• hyperventilation,

• panic,

• inability to eat or sleep,

• loss of enjoyment of daily activities,

• depression.

Short-term effects on victims include:

• preoccupation with the crime (thinking about it much, talking about it constantly, replaying the crime, wondering what they could have done differently, etc.),

• inability to concentrate or perform simple mental tasks,

• concern that other people will blame them for what has happened,

• increased strain on personal relationships (even to the extent of divorce or withdrawal of support).

Sometimes fraud crimes have led some victims to attempt or succeed in committing suicide.

Why are fraud crimes under-reported?

Groups and government agencies that help crime victims, say they have been slow to respond because the victims themselves are often too embarrassed to come forward. Many victims feel they have only themselves to blame when, in reality it is the calculating, skilled perpetrators are to blame for these criminal acts.

Although fraud victims are not alone, they often suffer their losses alone and in silence. Shame, guilt, embarrassment, and disbelief are among the reasons that only an estimated 15% of the nation's fraud victims report their crimes to law enforcement.