Scammed and scarred: Effects of investment fraud on its victims

2021 ◽  
Author(s):  
Samuli Knüpfer ◽  
Ville Rantala ◽  
Petra Vokata
Keyword(s):  
Investment Fraud

scholarly journals Predicting Fraud Victimization Using Classical Machine Learning

Entropy ◽  
2021 ◽  
Vol 23 (3) ◽  
pp. 300
Author(s):  
Mark Lokanan ◽  
Susan Liu
Keyword(s):  
Machine Learning ◽  
Financial Literacy ◽  
Learning Algorithm ◽  
Demographic Characteristics ◽  
Financial Knowledge ◽  
The Past ◽  
Machine Learning Model ◽  
Long Time ◽  
Regulatory Organization ◽  
Investment Fraud

Protecting financial consumers from investment fraud has been a recurring problem in Canada. The purpose of this paper is to predict the demographic characteristics of investors who are likely to be victims of investment fraud. Data for this paper came from the Investment Industry Regulatory Organization of Canada’s (IIROC) database between January of 2009 and December of 2019. In total, 4575 investors were coded as victims of investment fraud. The study employed a machine-learning algorithm to predict the probability of fraud victimization. The machine learning model deployed in this paper predicted the typical demographic profile of fraud victims as investors who classify as female, have poor financial knowledge, know the advisor from the past, and are retired. Investors who are characterized as having limited financial literacy but a long-time relationship with their advisor have reduced probabilities of being victimized. However, male investors with low or moderate-level investment knowledge were more likely to be preyed upon by their investment advisors. While not statistically significant, older adults, in general, are at greater risk of being victimized. The findings from this paper can be used by Canadian self-regulatory organizations and securities commissions to inform their investors’ protection mandates.

Profiling Victims of Investment Fraud: Mindsets and Risky Behaviors

2019 ◽  
Vol 46 (5) ◽  
pp. 904-914 ◽  
Author(s):  
Marguerite Deliema ◽  
Doug Shadel ◽  
Karla Pak
Keyword(s):  
Telephone Survey ◽  
Investment Decision ◽  
Risky Behaviors ◽  
Male Victims ◽  
Random Digit Dialing ◽  
Random Digit ◽  
Investment Decision Making ◽  
Investment Returns ◽  
Stock Traders ◽  
Investment Fraud

Abstract Millions of Americans are targeted by investment scams, resulting in billions of dollars lost each year. Previous research indicates that investment fraud victims are more likely to be male, white, and married, and to have higher socioeconomic status compared to the general US population, but little research examines what behaviors and mindsets differentiate them from other investors. A telephone survey was administered to 214 investment fraud victims and 813 general investors recruited using random digit dialing. Based on the opportunity model of predatory victimization, the aim was to identify differences in investment behaviors and psychological mindsets that may affect exposure to investment scams and make individuals more attractive and susceptible targets. In addition to being older and male, victims were more materialistic than general investors and were more frequent stock traders, and purchased more investments sold through unsolicited calls, emails, television advertisements, or “free lunch” seminars, but were less likely to invest based on a social network member’s recommendation. As more retirees begin to take on managing their retirement assets, many may be tempted by unreasonable investment returns promised by unscrupulous brokers. Findings point to specific areas where investor education is needed to counteract poor investment decision-making and risky mindsets.

scholarly journals Older and wiser: age differences in susceptibility to investment fraud: the protective role of emotional intelligence

2020 ◽  
Vol 32 (2) ◽  
pp. 152-172
Author(s):  
Emily A. Mueller ◽  
Stacey A. Wood ◽  
Yaniv Hanoch ◽  
Yumi Huang ◽  
Catherine L. Reed
Keyword(s):  
Emotional Intelligence ◽  
Age Differences ◽  
Protective Role ◽  
Investment Fraud

An Educational Program to Assist Clinicians in Identifying Elder Investment Fraud and Financial Exploitation

2012 ◽  
Vol 33 (4) ◽  
pp. 351-363 ◽  
Author(s):  
Whitney L. Mills ◽  
Robert E. Roush ◽  
Jennifer Moye ◽  
Mark E. Kunik ◽  
Nancy L. Wilson ◽  
...  
Keyword(s):  
Educational Program ◽  
Financial Exploitation ◽  
Investment Fraud

Policing advance fee fraud (AFF)

2017 ◽  
Vol 19 (1) ◽  
pp. 39-53 ◽  
Author(s):  
Julianne Webster ◽  
Jacqueline M Drew
Keyword(s):  
Early Intervention ◽  
Structured Interview ◽  
The Internet ◽  
Intervention Model ◽  
Innovative Strategies ◽  
Financial Gain ◽  
Advance Fee Fraud ◽  
The World ◽  
Investment Fraud ◽  
Different Parts

Advance fee fraud (AFF) involves an offender using deceit to obtain a financial gain from the victim. The victim believes that by forwarding a sum of money, there will be a future ‘pay-off’. The most commonly witnessed forms of AFF perpetrated via the Internet include classic ‘Nigerian’ or ‘419’ scams, investment fraud and romance fraud. Because of the largely transnational nature of AFF offending, where the victim and offender typically reside in different parts of the world, police are adapting their traditional and reactive approaches to more innovative strategies to combat this crime more effectively. This article utilises a qualitative, semi-structured interview design to explore the experiences of police detectives involved in the implementation of an early intervention model with victims of AFF. The study highlights the challenges involved in developing effective police strategies to proactively reduce the duration and severity of this type of financial victimisation.

scholarly journals Toxic Sovereignty:Understanding Fraud as the Expression of Special Liberty within Late-Capitalism

2018 ◽  
Vol 2 (2) ◽  
pp. 7-21 ◽  
Author(s):  
Kate Tudor
Keyword(s):  
Subjective Experience ◽  
Consumer Engagement ◽  
Late Capitalism ◽  
Consumer Sovereignty ◽  
Personal Freedom ◽  
Consumer Capitalism ◽  
Neoliberal Economics ◽  
The Absolute ◽  
The Individual ◽  
Investment Fraud

As a result of the pressures exerted by neoliberal economics and consumer capitalism, late-capitalist subjects are forced to compete in increasingly brutal circumstances in order to avoid the fate of symbolic and material annihilation. Economic and consumer engagement are not, however, solely based on coercion but are simultaneously facilitated by seductive ideals such as sovereignty. Conversations with those convicted for their involvement in investment fraud indicate the centrality of the notion of sovereignty to their subjective experience and, in turn, their motivation for fraud. The notion of economic sovereignty was key to their understanding of economic enterprise whereby they carved out spaces of extreme personal freedom in which they were free to engage in acts of serious and sustained economic predation. Similarly, perspectives on consumer sovereignty were characterised by a degree of excess whereby the individual who self-governs consumptive choices was replaced by the individual who is characterised by the absolute right to pursue pleasure in an unrestrained way. As a consequence, many personal barriers against harm and criminality were eroded. Thus, whilst acts of economic predation were driven by the deep-seated cultures of anxiety and insecurity produced within contemporary capitalism, they were also facilitated by the cultural profusion of notions of sovereignty in this context which ultimately served as a means of obfuscating the reality of the individual’s relationship with capital.

scholarly journals Collective action and UK wine investment fraud

2019 ◽  
Vol 12 (1) ◽  
pp. 118-136
Author(s):  
Karina Mari Olsen Einarsen ◽  
Lisa Jack
Keyword(s):  
Law Enforcement ◽  
Collective Action ◽  
Secondary Data ◽  
Social Engineering ◽  
Wine Industry ◽  
Small Scale ◽  
Content Type ◽  
Awareness Campaigns ◽  
Investment Fraud ◽  
Alternative Investment

Purpose The purpose of this paper is to examine the measures taken by legitimate wine investment companies and enforcement agencies to counter alternative investment scams. Design/methodology/approach The authors interviewed wine industry and law enforcement specialists to understand the nature of wine investment fraud and the characteristics of the victims. They also drew on secondary data in the form of government agency research and media sources. Findings The majority of wine investment frauds are boiler room operations, using social engineering techniques to draw victims into the fraud. The authors conclude that countering wine investment fraud requires public education by government, the wine industry and the police. Research limitations/implications This is a small-scale study that uses interviews with experts in the industry and in law enforcement and secondary data as evidence. Despite the limitations in the number of interviews, the authors are able to comment on the social impacts of alternative investment scams and suggest a theoretical basis for future work in the field. Practical implications The authors make a case for regulators and investors to be part of collective action through education and public awareness campaigns to combat alternative investment fraud. Originality/value The authors outline how collective action theory might be extended to investigate fraud prevention measures in other financial and commodity markets.

Victim Characteristics of Investment Fraud

2018 ◽  
Author(s):  
Steven Lee ◽  
Benjamin F. Cummings ◽  
Jason Martin
Keyword(s):  
Investment Fraud
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