Can you spot a scam? Measuring and improving scam identification ability

Journal of Development Economics, vol. 165, pp. 103147

Abstract

The expansion of digital financial services leads to severe consumer protection issues such as fraud and scams. As these potentially decrease trust in digital services, especially in developing countries, avoiding victimization has become an important policy objective. In an online experiment, we first investigate how well individuals in Kenya identify phone scams using a novel measure of scam identification ability. We then test the effectiveness of scam education, a commonly used approach by organizations for fraud prevention. We find that common tips on how to spot scams do not significantly improve individuals’ scam identification ability, i.e., the distinction between scams and genuine messages. This null effect is driven by an increase in correctly identified scams and a decrease in correctly identified genuine messages, indicating overcaution. Additionally, we find suggestive evidence that genuine messages with scam-like features are misclassified more often, highlighting the importance of a careful design of official communication.

Authors 5

1. Elif Kubilay

   University of Essex · IZA - Institute of Labor Economics

   Affiliation as printed

   University of Essex, United Kingdom

   IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics (Schaumburg-Lippe-Str. 5-9 D-53113 Bonn Germany - Germany)

   University of Essex (Wivenhoe Park Colchester CO4 3SQ - United Kingdom)

2. Eva Raiber

   Centre National de la Recherche Scientifique · Aix-Marseille Université · Aix-Marseille Sciences Economiques · Centre for Economic Policy Research

   Affiliation as printed

   Aix-Marseille Université, CNRS, AMSE, France

   AMSE - Aix-Marseille Sciences Economiques (5-9 Boulevard Bourdet CS 50498 13205 Marseille Cedex 1 - France)

   CEPR - Center for Economic Policy Research (United Kingdom)

3. Lisa Spantig corresponding Aachen

   University of Essex · Universitätsklinikum Aachen · RWTH Aachen University

   Affiliation as printed

   RWTH Aachen University, Germany

   University of Essex, United Kingdom

   UKA - Universitätsklinikum RWTH Aachen - University Hospital Aachen [Aachen, Germany] (Universitätsklinikum Aachen, AöR - Pauwelsstraße 30 - 52074 Aachen - Germany)

   University of Essex (Wivenhoe Park Colchester CO4 3SQ - United Kingdom)

4. Jana Cahlíková

   University of Bonn

   Affiliation as printed

   University of Bonn, Germany

   Universität Bonn = University of Bonn (D-53012 Bonn - Germany)

5. Lucy Kaaria

   University of Nairobi

   Affiliation as printed

   HOPAWI, Kenya

   University of Nairobi, Kenya

   UoN - University of Nairobi (P.O. Box 30197 - University Way - Nairobi - Kenya)