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News Release
FINRA Foundation

Angelita Williams, FINRA (202) 728-8988

New Research: Repeated Exposure to Fraud Awareness Education Reduces Susceptibility to Investment Scams

WASHINGTON, D.C.— While the economic fallout caused by COVID-19 has led to a significant rise in tips, complaints and referrals involving investment scams, new research from the FINRA Investor Education Foundation (FINRA Foundation) and the Center for Economic and Social Research (CESR) provides evidence that repeated exposure to concise, online educational interventions can reduce susceptibility to investment fraud among U.S. adults.

Researchers found that educational interventions can increase consumers' ability to recognize fraudulent investment opportunities and increase their knowledge about investment fraud. Further, there was no evidence that the interventions reduced consumers' interest in investing in legitimate investment opportunities. The study, Can Educational Interventions Reduce Susceptibility to Financial Fraud?, underscores the need for effective and ongoing fraud prevention education.

"Practitioners working in this space have been forced to rely on anecdotal evidence when justifying their efforts because until now, very little published research has examined whether educational interventions can meaningfully reduce individuals' susceptibility to financial fraud, whether they discourage investing in general, and whether any positive effects might persist over time," said Gerri Walsh, President of the FINRA Foundation. "These findings underscore the need for repeated exposure to educational resources that enable individuals to make informed choices and help them to recognize, avoid and report financial fraud."

"Our research suggests that short, easily scalable online education programs can meaningfully reduce adults' susceptibility to investment fraud—and that these effects can persist with repeated exposure," added CESR researcher Jeremy Burke.

Using a sample of 2,000 adults drawn from the Understanding America Study—a nationally representative survey panel—participants were randomly placed into one of three groups:

  • a video treatment in which subjects viewed a three-minute educational video about techniques often present in investment fraud;
  • a text treatment in which participants were provided online reading materials about techniques often present in investment fraud (the same information offered to the video treatment group, but in a concise text format); and
  • a control group in which participants received no educational intervention.

The educational interventions were centered on the five techniques fraudsters often employ when engaging in investment fraud. Researchers measured fraud susceptibility immediately after the initial intervention and again six months later, using investment pitches drawn from real-world investment offers and enforcement actions initiated by the U.S. Federal Trade Commission. Researchers also intermixed legitimate investment pitches with fraudulent investment pitches to examine whether the interventions influenced participants' general willingness to invest.

Key findings from the report include:

  • Educational interventions have immediate positive impacts. Shortly after receiving the initial intervention, participants who received the video and text treatments displayed significantly lower willingness to invest in the fraudulent investment opportunities offered than the individuals in the control group.
  • Educational interventions have lasting effects when coupled with repeated exposure. While the positive effects of the educational intervention decayed over time, the effects of the intervention persisted for participants who received a secondary intervention. Respondents who received the secondary intervention three months after the initial one expressed a willingness to invest in fraudulent investment opportunities at the six-month mark at a rate that was 10 percent lower than individuals in the control group.
  • Educational interventions had no effect on participants' willingness to invest in legitimate investment opportunities. Following their exposure to the educational interventions, participants were able to internalize the information and apply it without being dissuaded from investing in general at the six-month mark.
  • Educational interventions increase knowledge. Individuals who were exposed to the first and second educational interventions had higher levels of consumer knowledge than those in the control group, based on their responses to a five-question test. This suggests that the secondary intervention created lasting impacts on consumer knowledge. The study also found evidence that this increased knowledge may have led to the meaningful increases in the ability to recognize fraudulent investments.
  • The effectiveness of educational interventions varies by consumer characteristics. Individuals with higher cognitive ability and higher financial literacy disproportionately benefited from the educational interventions. Researchers did not see any effect of the interventions for those with low cognitive ability or low financial literacy.

Despite the effectiveness of the interventions, researchers did observe that study participants across all treatment conditions had a higher willingness to invest in the fraudulent opportunities than the legitimate ones, which suggests how much more compelling fraudulent opportunities can be relative to legitimate opportunities and highlights the difficult task financial fraud educators face.

Investors with questions or concerns surrounding their brokerage accounts and investments can contact the FINRA Securities Helpline for Seniors toll free at 844-57-HELPS (844-574-3577) Monday through Friday from 9 a.m. – 5 p.m. ET. FINRA staff can help investors with concerns about potential fraud or unsuitable or excessive trading; answer questions about account statements or basic investment concepts; and assist beneficiaries who are having trouble locating or transferring their deceased parents' assets.

About Center for Economic and Social Research (CESR)

CESR is a center within the University of Southern California's Dana and David Dornsife School of Letters, Arts and Sciences. CESR's scientists, colleagues and staff pursue compelling, data-driven research in the social sciences and economics that further understanding, policy making and quality of life. Our research explores the impact of social services and public policy, shifting population trends and their implications, and how human behavior—our attitudes, actions, and ability to make decisions—affects our well-being now and as we age. For more information, visit

About the FINRA Investor Education Foundation

The FINRA Investor Education Foundation supports innovative research and educational projects that give underserved Americans the knowledge, skills and tools to make sound financial decisions throughout life. For more information about FINRA Foundation initiatives, visit


FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit