Fraud Prevention Month Post-campaign Public Opinion Research – June 2007

II. Key Findings

A. Mass Marketing Fraud: Perceptions and Self-Reported Incidence of Targeting/Victimization

The vast majority of Canadians across all demographic groups continue to consider mass marketing fraud to be a serious problem. When asked how serious a problem mass marketing fraud was, just over 90 per cent of Canadians said it was either a very serious (40%) or a somewhat serious (50%) problem. This represents an increase over the 2006 result (86%), which was itself an increase over 2005 (83%). While close to nine-in-ten report some level of concern across all demographic groups, younger people aged 18 to 34 are less likely to view mass marketing fraud as a very serious problem (23%), compared to people aged 35 to 54 years old (40%) and those aged 55 years and above (49%). Correspondingly, younger people are much more likely to view mass marketing fraud as only a somewhat serious problem (64%) than those in the 35 to 54 (52%) and 55+ age categories (42%). Regionally, Quebecers are the least likely to think mass marketing fraud is a very serious problem (34%) and the most likely to view it as a somewhat serious problem (52%).

By the same token, most Canadians (82%) believe that mass marketing fraud by phone, regular mail or email is on the rise. This is a larger proportion than was recorded in the previous two years when just over three-quarters of Canadians said they thought mass marketing fraud was on the rise. Similar to the age differences noted for the seriousness of mass marketing fraud, younger Canadians of 18 to 34 years of age (74%) are less likely to consider mass marketing fraud to have increased over the last few years than those in either the 35 to 54 age group (83%) or people of age 55 and above (86%). Across the regions, Quebecers (86%) are the most likely to say that mass marketing fraud has increased in recent years, although, as noted above, they are less likely to see it as a "very serious" problem.

There is a slow rise in the proportion of Canadians who consider different types of mass marketing fraud as serious. The percentage who consider it a serious issue to be asked to donate to fake charities (89%) or to be told that you have won a prize, but only on the condition that you purchase something first (89%), has increased slightly in each of the past two years. Not receiving the product you purchased by phone, internet or mail in a timely fashion is considered to be serious by 79 per cent, while another 86 per cent regard receiving something inferior to what was paid for as serious; this compares to the 84 per cent in 2006 and 82 per cent in 2005 who said not receiving the product or receiving something inferior was serious. Women are slightly more inclined to view each of these problems as serious compared to men. Younger people aged 18 to 34 (38%) are significantly less likely to regard fraud related to prizes as very serious than those in the 35 to 54 age group (55%) while those people of age 55 and above (63%) are significantly more likely to consider this type of fraud as serious. Residents of Quebec are more inclined to say that not receiving the product in a timely fashion is serious.

There is a small increase in the proportion of Canadians who report that either themselves or someone in their household have been a target or victim^{Footnote 1} of mass marketing fraud. The victimization rate slowly rose from 28 per cent in 2005, to 31 per cent in 2006 and finally, 35 per cent in 2007. It is also important to note that two-in-five victims (14 percentage points out of the total of 35) report that the incident(s) have happened within the last six months. Individuals between the ages of 18 and 34 (41%) are more likely to report they, or someone in their household, may have been a victim of mass marketing fraud than those 35 to 54 years of age (36%) or those 55 years and older (29%). This reported level of victimization among younger Canadians is particularly interesting given that it is this group that expressed the lowest level of concern about the seriousness of mass marketing fraud. People with only a high school level of education (27%) are less likely to report being a victim than those who have attended college (40%) or university (37%). Reported levels of victimization increase across the five regions from east to west, with less than three-in-ten (27%) of Atlantic Canadians reporting being a victim of mass marketing fraud and rising to over four-in-ten (41%) of British Columbians.

B. Identity Theft: Self-Reported Incidence of Targeting/Victimization

The percentage of those who say they have either been a target or victim of identity theft is lower compared to the figures for targeting or victimization from mass marketing fraud schemes, with 20 per cent of Canadians reporting an incident affecting at least one person in their immediate household in 2007. Comparable results in 2005 (18%) and 2006 (17%) indicate a fairly stable proportion report having been a victim of identity theft. As with mass marketing fraud, those with an educational attainment of a high school diploma or less (15%) are less likely than those with a college (26%) or university (21%) education to report being a victim of identity theft. Residents of British Columbia (27%) and Ontario (23%) are more likely to say they have been a victim of identity theft than residents of other regions: Atlantic (15%), Quebec (15%), and Prairies (17%).

C. Response to Marketing Fraud and Identity Theft

While fewer people are taking no action in response to mass marketing fraud, it remains the case that most do not make a significant effort to report or resolve an incident. In 2007 three-in-ten (30%) victims of mass marketing fraud said they "did nothing" in response. This is down from 2006 (38%) and 2005 (43%). Hanging-up (7%) and refusing to buy anything (3%) were some of the limited actions taken by other victims. Complaining directly to the company involved was the most common response of 18 per cent of victims. Reporting the incident to their credit card company (7%), their bank (4%), the Better Business Bureau (3%), or PhoneBusters (1%) was less common. More robust actions such as calling the police (8%), cancelling their credit card (2%), demanding a refund (2%) or contacting a lawyer (1%) were reported by relatively few. Education level appears to have some level of influence on taking action, with 37% per cent of those with a high school education reporting having taken no action, falling to 35 per cent for those college educated and 24 per cent of those university educated. Complaining directly to the company involved shows the opposite trend with 12, 14 and 24 per cent respectively, indicating they took this action.

The reasons given for not taking any action reflect Canadians' concerns about the level of effort required to follow up and a general sense that the trade-off between effort/time and payoff does not favour pursuing the matter. Indeed the top four most common reasons given for inaction suggest that this is the case:

• The amount of money was not worth reporting (13%);
• Did not think it was worth it (11%);
• Too much effort (8%); and
• Did not care enough or forgot (8%).

When those who have not been victims of mass marketing fraud are asked to consider what actions they might take if they were to receive a fraudulent solicitation, a similar pattern of responses is observed. Again, one-in-five (19%) say they would not take any action if they or someone in their household were defrauded. This proportion is the same as in previous years (21% in both 2005 and 2006). Moreover, 17 per cent say that they would simply hang up and another 9 per cent state that they would just ignore it. The most frequent answer given was that they would contact the local police (30%). These results have been very consistent over the past two years (30% in 2005, 31% in 2006). As in previous years, intentions contrast sharply with actions, when faced with a real or perceived incident of mass marketing fraud. A much smaller proportion of self-identified victims say they did in fact call the police (8%).

Also contrasting with findings among those who have been victimized is the fact that only 4 per cent of non-victims say that they would phone the company directly, while 18 per cent of victims took this course of action. This contrast between the responses given by the two groups indicates that Canadians, while suggesting that they would take a certain action, in reality are clearly reluctant to do so because they do not believe it is worth the effort.

Younger Canadians aged 18 to 34 (20%) are less likely to consider reporting the incident to the police than those 35 to 54 years of age (35%) or those 55 years and older (30%). Interestingly, those with higher education levels report a greater propensity to take no action. Of non-victims with a high school level of education, 14 per cent say they would "do nothing" compared to 19 per cent of those who have attended college and 22 per cent of university graduates. This is in contrast to the 37 per cent, 35 per cent and 24 per cent of victims in these groups respectively who did nothing in response to an actual or perceived incident.

British Columbia residents (20%) are much more likely to consider reporting an incident to the Better Business Bureau than individuals in other provinces (2%–8%). Again, a benefit effort trade-off appears to be at work here since none of the BC victims actually made a report to the Better Business Bureau.

As was the case for 2005 and 2006, contacting credit card companies is the most common response to identity theft by those who have been victimized. In total, 23 per cent of respondents reported complaining to their credit card company. This is down from 2005 (26%) and 2006 (33%). By contrast, the proportion saying they reported the incident to their bank or financial institution has increased to 20 per cent from 9 per cent in 2005 and 12 per cent in 2006 and is now the second most common action taken in response to a case of identity theft. Sixteen per cent of respondents noted that they would do nothing, consistent with findings from 2005 (18%) and 2006 (15%). Complaints to police have continued a downward trend over the past two years (16% in 2005, 15% in 2006) and are now at 13 per cent. Rounding out the top five actions taken, changing or cancelling banking and credit card information was mentioned by nine per cent of respondents.

D. Awareness of Marketing Fraud and Identity Theft Messaging

Exposure to messages regarding mass marketing fraud and identity theft remains high at 80 per cent. This number is significantly higher than for 2006 (73%) and is a return to the levels observed in 2005 (78%). Once again, there is clear age effect with regards to messaging on mass marketing fraud and identity theft, with only 66% of those between the ages of 18 to 34 having seen, heard or read anything about it, compared to 83% among both those 35 to 54 years of age and 55 years of age and older. Similar differences can be observed for respondents with varying levels of educational attainment, as 71% of those with a high school diploma or less reported seeing, hearing or reading anything about mass marketing fraud and identity theft, compared to 78% for those with a college education and 87% for those with a university degree.

Among those who recall seeing, hearing or reading something about fraud, including mass marketing fraud and identity theft, 16 per cent specifically recall messages on the topic of "Fraud Prevention". Additionally, 17 per cent recalled messages about identity theft and protecting your identity, and 3 per cent mentioned the need to shred personal information. Many people saw, heard or read information on specific types of fraud such as credit card (17%), debit card (9%), real estate and mortgage (5%) and Internet-based fraud (5%).

More than half (58%) of those who have seen, heard or read something about fraud but did not specifically identify fraud prevention as the key message in their response to the unaided question, agreed that they had seen, heard or read something about fraud prevention when directly asked. Among those who have seen, heard or read something about fraud prevention, nearly half (46%) say it was in news coverage on television, radio or in print. Just over one-third (35%) recall an ad in a magazine or newspaper, and one-in-five (21%) saw a public service announcement (PSA) on television.

When asked to recall the main message of what they had seen, heard or read about fraud prevention, 6 per cent spontaneously recalled the tagline "Fraud: Recognize it. Report it. Stop it." This compared to no one spontaneously recalling the tagline in 2005 and only 2 per cent remembering it in 2006. The relatively low level of recall of the tagline is likely a factor of respondents' exposure to messages about fraud prevention via various channels. As noted in the paragraph above, a plurality recall seeing something on the topic in earned media coverage, where there is less likelihood that the tagline may have been prominently featured as part of the coverage versus advertising or PSAs. Other main messages retained included be careful who you trust (23%), be careful/cautious (14%), do not give out personal information (7%) and be careful about telephone solicitation (7%).

When prompted, 23 per cent said that they did remember the tagline "Fraud: Recognize it. Report it. Stop it.", for a total of 29 per cent when adding the 6 per cent who mentioned the tagline unprompted in response to an earlier question. This is nearly identical to the 28 per cent aided and unaided recall of the tagline in 2006.

The vast majority (86%) of those who remembered the tagline believe that the message was either somewhat (36%) or very (50%) useful. These results are similar to those observed in 2006 where again 86 per cent of those who remembered the tagline that year found the message either somewhat (41%) or very (45%) useful.

E. Response to Messages

Importantly nearly two-thirds (63%) of respondents who recall the tagline "Fraud: Recognize it. Report it. Stop it." say what they saw, heard or read, has made them change the way they respond to possible mass marketing fraud or identity theft incidents. More than one-in three (36%) say that their response to possible mass marketing fraud or identity theft has changed "a great deal" and another 27 per cent said it has changed "somewhat".

When asked which organization they would contact if they wished to report suspicious or fraudulent mass marketing activity or an incident of identity theft, more than half (57%) of Canadians named their local police force, and another 17 per cent mentioned the RCMP; one-in ten (10%) would contact the Better Business Bureau. These numbers are directly in-line with the findings of 2005 and 2006. Only 2 per cent of Canadians suggested PhoneBusters as an organization to which they would report suspected fraudulent activity. Younger Canadians aged 18 to 43 (49%) are less likely to file a report with local police than those in the 35 to 54 age group (56%) or 55 years of age and older (61%).

F. PhoneBusters

One-in-five Canadians (22%) is aware of the organization PhoneBusters. This represents a small increase in awareness over 2006 (19%) levels. As in previous years, the awareness level is clearly lower in the province of Quebec, where only 10 per cent of respondents have heard of PhoneBusters, and in British Columbia where 18 per cent of residents are aware of the organization.

On the other hand, after hearing a description of the organization and its mandate, 83 per cent (81% in 2005, 84% in 2006) of Canadians said that they were likely to call PhoneBusters if they suspected that they had been a target or victim of mass marketing fraud or identity theft. Importantly, 64 per cent said that they were "very likely" to call, compared to only 19 per cent stating that they were "somewhat likely" to do the same. This in turn indicates that an increase in awareness could potentially make a big difference in Canadians' behaviour when faced with suspicious mass marketing schemes or possible identity theft.

G. Means of Combating Marketing Fraud and Identity Theft

Public education continues to be considered the most effective way to combat fraud such as mass marketing fraud and identity theft in Canada with three-in-five (59%) holding this view. Better enforcement of current laws (20%) and adverting (12%) are supported by far fewer people. Only 7 per cent of Canadians feel there no effective way to combat mass marketing fraud. Of note is the fact that people with a high school diploma or less (46%) are significantly less likely to advocate public education as a solution when compared to those with a college (59%) or university (67%) education.