Impact of IIPS Fraud

Experiences of fraud can be financially and emotionally costly. Low financial and digital literacy among low-income and women end users makes them more vulnerable to fraud negatively affect their trust in and reliance on IIPSs.

Distrust of the financial system was cited by 23% of unbanked adults as the reason for not having an account.
Findex 2022

Women tend to have a higher lack of trust in financial services and providers.
Global Banking Alliance for Women, USAID

In India, three in 10 respondents stopped using DFS after a fraud event.
BMGF-sponsored study

BMGF-sponsored qualitative and quantitative studies in Ghana, Uganda, and India uncovered the following impacts to end users as a result of instant payments fraud:

Across all three markets, respondents described an intense emotional toll after falling victim to fraud, with feelings of shame, anger, and depression common. Indians, more than in the other two study markets, reported blaming themselves for falling victim to fraud in DFS.

Respondents said impact to livelihoods can be severe when losses were high. Respondents in Uganda and Ghana reported missing payments for school fees, delaying medical treatment and business expansion, and cutting back on monthly household expenditure including food expense. In India, where losses were milder, respondents reported minor cutbacks to monthly expenditures.

After a fraud event, victims said they have little recourse beyond learning how to avoid falling victim a second time. For respondents who chose to report a fraud event to the DFS provider on whose network the fraud occurred, efforts did not result in funds recovery and sometimes resulted in victim shaming.

“I felt very, very bad because [when] I got frauded, that was my last money. What am I going to use? So, I was very frustrated.”
Woman End User, Koforidua

“My own [fraud loss] affected my job. The fraudsters, the money that they took from my account, I was going to use it to buy the materials for my customers for dresses and things and they defrauded me. So I didn’t even open the store for almost a month.“
Woman End User, Takoradi

Next Topic in this Section: Types of Fraud in IIPSs