Scam warning letters and risky financial transfers

Loss Aversion and Consumer Protection
Intervention Consumer Protection

How framing letters presenting risks and losses can help potential scam victims

Intervention Description

The Australian Consumer and Competition Commission aimed to respond to a high number of victims of financial scams. Differently worded warning letters were sent to potential victims of fraud. The messages contained implicit and explicit information framing risk in terms of gains or lossess. The letters resulted in a 75% reduction in risky finanical transfers. However this study did not provide clear results on the effectiveness of each message.