Coping with Consumer Fraud: The Need for a Paradigm Shift.

For years law enforcement and consumer education practitioners have developed speaker programs, user guides, and other informational initiatives to help consumers avoid economic exploitation by criminal elements. (For recent examples, see Mott 1993; Schulte 1994; Shadel and John T. 1994; Whitlock 1994.) While these practitioner-launched undertakings are undoubtedly valuable to many consumers, it is the contention of this paper that they would be even more valuable if the advice they offered drew upon a larger and more diverse informational base. In this paper an informational base commonly associated with consumer initiatives for avoiding victimization is described along with its limitations. Also described and illustrated with a detailed case study is a plan for enlarging the informational base to provide more useful behavioral guidelines for helping consumers avoid victimization. CURRENT INFORMATIONAL BASE AND ITS LIMITATIONS The informational initiatives noted above, like most consumer guides for avoiding victimization by criminals, are often authored by practitioners with considerable professional experience dealing with criminal cases of consumer fraud. This experience typically takes the form of criminal investigations or prosecutions at federal, state, or local levels. The natural unit of description and analysis is often the individual police or agency report which describes in detail the particulars of an alleged act of fraud and its impact on the victim (e.g., financial losses incurred). While such reports offer several advantages to the practitioner who hopes to help consumers avoid victimization (e.g., the reports provide a wealth of swindle particulars useful in informational and educational programs), the cases they consider are unlikely to be representative of seams at large. Many crimes go unreported. This is especially true of confidence swindles (Alston 1986). The victims who fail to report these crimes are often found to be naive individuals who do not know they have been swindled, and if they do, they do not know to whom to turn once a swindle has occurred (Blum 1972). For these various reasons, among others, available case studies may offer an unrepresentative picture of the population of actual confidence swindles. A second weakness of case studies concerns their lack of information about critical incidents or stimuli that lead to consumer victimization (Fattah and Sacco 1989). It may be helpful to get an impression, albeit unrepresentative, of when and where swindles occur, but this general information is unlikely to be sufficient to help consumers ward off a swindle's sophisticated approach. It is not enough to provide a set of general background characteristics to be on guard against as this leads to many "false positives" being identified by consumers in that many individuals or circumstances that fit the swindle category also fit the non-swindle category. What is especially needed to resolve such dilemmas is what behavioral theorists refer to as discriminative stimuli and responses, stimuli and responses whose presence is associated with a swindle situation and whose absence is associated with a non-swindle situation (Donahoe and Palmer 1994). In lay terms we should think of discriminative stimuli as danger signals and discriminative responses as escape mechanisms. Unfortunately, analyses of case studies of swindles reveal few danger signals and escape mechanisms. This finding should come as no surprise because case studies typically found in police files have been placed there as a result of the failure of swindle victims to recognize and act upon discriminative stimuli. HELPING OLDER AMERICANS COPE WITH CONFIDENCE SWINDLES: A PILOT STUDY To secure needed information on danger signals and escape mechanisms, it was decided that a new strategic approach was needed, one that focused on the coping behaviors of consumers who have been successful in dealing with the attempts of confidence swindlers to defraud them. …