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It’s All Over but the Crying: The Emotional and Financial Impact of Internet Fraud

in last issue’s column, Monica T. Whitty provided an overview of mass-marketing fraud.1 In this article, we delve deeper into the emotional aftermath of Internet fraud. We empirically show that understanding fraud’s emotional consequences is necessary in the fight against fraud. Different affective costs are associated with different types of traditional crime; so, we reasonably assumed that different types and magnitudes of emotional costs would be associated with different types of Internet fraud. Our study analyzed these emotional consequences, ranking the most prevalent fraud types by perceived impact. We specifically hypothesized that

■ becoming an Internet fraud victim carries emotional as well as financial costs,

■ these financial and emotional costs vary across fraud categories, and

■ individual personality traits influence the victims’ perceptions of impact.

Effects of Victimization

Despite Internet fraud’s hold on the public interest, the probability of becoming a victim is fairly low. Doug Shadel and Karla Pak estimated a 7 percent response rate to Internet fraud,2 while David Modic and Steven Lea found that only 17 percent of the general population responded to scams.3 Cormac Herley argued that some fraud types (such as the Nigerian advance fee fraud) are purposely transparent to glean the most naive individuals, thereby increasing the chances of fleecing eventual responders.4 But although Internet fraud’s incidence rates are low, its eventual costs are high because of the sheer scale at which these scammers operate.

Ross Anderson and his colleagues estimated direct losses in the hundreds of millions of pounds per year for credit card fraud alone, with the global figure being 20 times as large.5 Consumer agency estimates from across the globe vary wildly.6–8 There’s little doubt that being a crime victim has both emotional and financial consequences, but comparably little research has focused on the victims’ emotional costs.

Mark Button and his colleagues demonstrated that many hidden emotional costs, such as stress, result from the financial hardship and relationship issues associated with fraud victimization.9 Doug Shadel argued that victims’ fear of secondary victimization (victim blaming) strongly influences their subsequent decision making.10 Finally, Whitty and Tom Buchanan reported that victims of romance scams, or “lonely-hearts

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