How Financial Stress Contributes To Poor Decision Making And How To Avoid It
A viral social media trend exploited a loophole for JP Morgan Chase customers to get free money at the ATM — or so they thought. The glitch involved depositing fake checks for large sums of money and removing the portion of available funds before the check cleared. While this so-called glitch is essentially a form of check fraud, it demonstrates the harmful nature of viral activity combined with poor financial advice in times of financial stress or hardship.
The Reality Behind Viral "Free Money" Trends
A spokesperson for Chase shared that consumers should be skeptical and if something seems too good to be true, it likely is according to an article from the NY Post. The spokesperson shared “We are aware of this incident, and it has been addressed. Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple.”
This is not the first time viral social media has nudged consumers into poor financial decision-making, however. Major examples include:
- Pyramid schemes like the viral blessing looms/money circles;
- PPP loan fraud schemes;
- Cash app scams;
- Etc.
While many times these trends end up being misleading at best and illegal at worst, unfortunately, ignorance is not an excuse for breaking the law which can lead to greater financial trauma-related stress, fines or penalties, and even jail time. The long-term impact of some of these schemes like the Chase bank check fraud can also result in disqualification from participating in banking services and a negative impact on consumer credit reports.
The Impact of Financial Stress on Decision-Making
47% of Americans say money is negatively impacting their mental health says a survey conducted by Bankrate. Financial stress specifically can induce behavior that regulates individuals’ exposure to that stressor. According to a study by PeerJ, stress provokes a pattern of harm-avoidant behavior.
Read More: 5 Tips From A Financial Therapist For Managing Financial Anxiety
These findings can demonstrate the susceptibility of financially stressed populations to these trends due to their current financial status. That is to say that a lack of financial education on the negative impact of these trends can make the prospect of “free money” an appealing one, thus engaging in a harm-avoidant behavior by decreasing the burden of their current financial stressor.
Alternatively, the potential consequences of engaging in the financial fraud is a distant enough harm that the slight relief experienced by engaging in a potentially risky behavior coupled with demonstrations of success seen on social media make it a viable choice for relief in the moment. While these findings don’t change the legal implications of the behavior, it does explain how the financial stress and the appearance of relief from that stress contributes to the virality of these trends.
Understanding the Red Flags of Viral Financial Trends
A good rule of thumb when it comes to these viral financial trends is to do your own research. If the solution to your financial problems is going viral on social media, or drives up scarcity with a message of act now before it’s too late, it’s probably not a viable or legitimate solution.
- When in doubt, go to the source. If the offer or solution indicates it’s coming from a well known brand or entity look for official statements from said brand or entity highlighting the offer.
- Avoid providing sensitive information over the phone or online to unverified sources.
- If you are pressured to recruit others in order to claim your reward, you’re likely participating in a pyramid scheme.
- Seek help from reputable financial counselors or financial therapists, emergency assistance programs, or other credentialed financial professionals. Not all financial professionals are created equally as some specialize in a particular area or function that may not be relevant to your specific inquiry.
- Visit the FINRA database for professional designations to learn more about the different types of designations available and how they can help with your specific inquiry or need.
Have you ever been tempted by a viral "get-rich-quick" trend? What are your thoughts on the dangers of these schemes, especially in times of financial stress? Share your experiences or questions in the comments below or mention me on social media, and let's discuss how we can protect ourselves and our communities from falling victim to these harmful trends.
