The Effect of Financial Literacy on the Ability to Detect Investment Fraud

Abstract

The financial sector has been increasingly digitized over the last few years, and the volume of fraudulent operations has also increased, which can have severe consequences. People's digital lives are growing along with the proliferation of the internet and other digital media, giving rise to increasingly sophisticated forms of fraud as a result of the increasing availability of various financial services, which of course will be detrimental to potential investors who want to develop their businesses due to their very minimal knowledge of finance. This study aims to examine the effect of financial literacy on the ability to detect investment fraud, with the moderating variables of gender, age, and level of education. With a sample of 400 residents living in Greater Solo, this study used simple linear regression analysis and Moderated Regression Analysis (MRA). Based on the results and discussion of the above research, financial literacy has a positive and significant effect on the ability to detect investment fraud. In addition, the factors of gender, age, and education have no significant effect on moderating the effect of financial literacy on the ability to detect investment fraud.

Internet Users’ Perception of the Prevalence of Online Investment Fraud and Victimisation in Nigeria

“…According to him, unlike the traditional criminal gangs, both male and female are functionally involved in internet fraud. Nursanti and Trinugroho (2024) in their "The effect of financial literacy on the ability to detect investment fraud" research found that individuals with higher levels of financial literacy demonstrate a greater ability to detect investment fraud. They also found that socio-demographic characteristics such as gender, age, and education have no significant effect on controlling the effect of financial literacy on the capacity to detect investment fraud.…”