Financial frauds’ victim profiles in developing countries

Abstract

Recently, the variety of the financial frauds have increased, while the number of victims became difficult to estimate. The purpose of this paper is to present the main profiles of financial frauds’ victims using a reviewing method. The analysis captures the main theoretical and empirical background regarding the motives and circumstances of becoming a victim, the dynamics of several social and demographical characteristics of this type of victims, as well as a sample of relevant case studies from some developing countries. The main finding is that, in literature, most of the victims are male people of different ages, employed, married or single, regardless the level of education. For developing countries such as China, India and Nigeria, the majority of victims act out of naivety and desire to escape from poverty, while some victims from Latin America, China and Nigeria are influenced by greed and lack of empathy, without thinking of further consequences for their families and friends involved. Moreover, most of the victims are convinced to invest in financial schemes by family members, friends, or acquaintances.

A Microsimulation of Well-Being and Literacy Interventions to Reduce Scam Susceptibility in Older Adults

“…A growing body of literature and fraud prevalence studies (Anderson, 2019) show that people of all ages possess risk factors that may increase their susceptibility to scams (Hanock & Wood, 2021), and that different age groups are affected by various forms of fraud (Bar Lev et al, 2022; Pak & Shadel, 2011). Studies focused on older adults suggest that changes in decision-making are linked to scam susceptibility (Boyle et al, 2012; Han et al, 2016a, 2016b; Yu et al, 2021) and financial exploitation (Spreng et al, 2017).…”

The effect of financial literacy, financial behaviour and financial stress on awareness of investment scams among retirees

“…In recent years, investment scams have been thoroughly investigated both at the national and international levels (Lev et al , 2022; Moosa, 2022). An investment scam refers to a form of financial fraud that involves repeated interaction with an increasingly large number of individuals over a long period of time (Carey and Webb, 2017).…”

“…This is because developing countries often have less stringent regulations and enforcement mechanisms in place to prevent financial scams (Monroe et al , 2010), and a large portion of the population in developing countries may not have access to financial education, making them more vulnerable to investment scams (Karakurum-Ozdemir et al , 2019). More recently, Lev et al (2022) found that for developing countries such as China, India and Nigeria, the majority of victims act out of naivety and desire to escape from poverty, while some victims from Latin America, China and Nigeria are influenced by greed and lack of empathy, without thinking of further consequences for their families and friends involved. Moreover, most of the victims are convinced to invest in financial schemes by family members, friends or acquaintances (Lev et al , 2022).…”

“…More recently, Lev et al (2022) found that for developing countries such as China, India and Nigeria, the majority of victims act out of naivety and desire to escape from poverty, while some victims from Latin America, China and Nigeria are influenced by greed and lack of empathy, without thinking of further consequences for their families and friends involved. Moreover, most of the victims are convinced to invest in financial schemes by family members, friends or acquaintances (Lev et al , 2022). Despite these findings, studies of investment scams within developing countries, including Malaysia, are still limited.…”

“…A danger of this is that their desire to overcome their financial stress may act against their better judgement when it comes to evaluating investment opportunities. Lev et al (2022) suggest that most of the victims are male people of different ages, employed, married or single, regardless the level of education. One of the most vulnerable victim groups is retirees, who may face dire consequences in the form of irreversible economic losses and great psychological distress (Shao et al , 2019).…”