Who Is Next? A Study on Victims of Financial Fraud in Japan

Abstract

Japan has seen an increase in the incidents of financial frauds over the last couple of decades. Although authorities are aware of the problem, an effective solution eludes them as fraudsters use innovative swindling methods and continually change the target group. Using a nationwide survey conducted by Hiroshima University, Japan, in 2020, this study investigated the socioeconomic and psychological profiles of victims of trending and special financial fraud such as fictitious billing fraud, loan guarantee fraud, and refund fraud. It was found that financial fraud victims' profiles are dissimilar at the aggregate and specific levels. At the specific level, victim profiles were diverse, that is, in fictitious billing fraud, loan guarantee fraud, and refund fraud cases. Males, married, and financially less satisfied people were more often victims of fictitious billing fraud; less anxious people were more likely victims of loan guarantee fraud; and older, asset-holding, and less-income-generating respondents were found to be victims of refund fraud. Our results also show some commonalities in the victims' profiles. For example, financially less-literate people were found to be more likely victims of fictitious billing fraud and loan guarantee fraud. Finally, respondents who lived with their family, those who did not have careful buying habits, and those who suffer from bouts of loneliness were found to be common victims of all types of special financial fraud. The results of our study suggest that a one-size-fits-all policy cannot effectively combat financial fraud.

The determinants of investment fraud: A machine learning and artificial intelligence approach

“…There is an association between male investment advisors and female investors. These findings suggest that male advisors are more likely to gain the trust of female advisors and swindle them in return (see Kadoya et al, 2021 ; Knüpfer et al, 2021 ; Lokanan and Liu, 2021 ).…”

Financial frauds’ victim profiles in developing countries

“…The level of prior knowledge in financial field plays an important role in attracting fraud victims, even if the opinions are divided regarding this role. AARP (1999) , Langenderfer and Shimp (2001) , and Kadoya et al (2021) found that the absence of prior knowledge about frauds or in a field related to a particular fraud (e.g., financial or investing), increases the chance of falling victim to the scam. Almost 75% of the interviewed victims by AARP (2007) have a low level of financial investing knowledge.…”

“…Generally, most of the victims are small savers, looking for an alternative to investing their money, relying on advice from family and friends ( Shadel and Schweitzer-Pak, 2007 ). On the other hand, single people are more vulnerable of being victims than married ones considering the social isolation and feelings of loneliness ( Kadoya et al, 2021 ).…”

Integrating Individual Factors to Construct Recognition Models of Consumer Fraud Victimization

“…In recent years, consumer financial fraud, defined as “crimes against consumers in which deceptive or false acts are committed for personal financial gain” [ 2 , 3 ], has attracted increasing attention from academia and government. Consumer financial fraud not only poses a threat to the consumer economy [ 4 , 5 , 6 , 7 ] but also causes victims to suffer physical, mental, social, and legal harm [ 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 ]. The great threat to public health makes anti-fraud an urgent issue.…”