Financial education research shows that higher levels of financial literacy are associated with saving more, planning more carefully, seeking more information and comparing offers, avoiding bad deals and recognising good ones, and making provisions for the future, such as retirement. But does financial literacy also help people to recognise financial scams and avoid falling victim to them, and does financial education about financial scams help people to recognise financial scams?

This paper first provides a systematic overview of common financial scams. It then analyses existing evidence on understanding financial risks and being careful with personal data, as well as research on the positive effects of financial education. The main part of the paper examines the importance of financial education in recognising financial fraud and the effectiveness of financial education interventions in preventing financial fraud, and draws implications for financial education programmes and the teaching of personal finance.

Keywords: Financial literacy, financial education, financial fraud.