Cognitive heuristics and risk evaluation in crisis fraud

Joshua Chang and Mark David Chong

Journal of Financial Crime, 2021, vol. 29, issue 2, 447-459

Abstract: Purpose - The recent COVID-19 crisis has been followed by an epidemic of fraud. This study aims to evaluate cases of COVID-19-related fraud to identify cognitive heuristics that influence decision-making under the pressure of crisis conditions. Design/methodology/approach - An analysis of fraud advisories and cases relating to COVID-19 is conducted and matched against various types of cognitive heuristics to explain their influence on victims of crisis fraud. Findings - The affect, availability, cue-familiarity, representativeness and scarcity heuristics are identified and explained to have a substantial influence on risk evaluations of crisis fraud. Originality/value - The findings from this study can help individuals avoid fraud victimisation by helping them understand psychological vulnerabilities that they may be unaware of under the pressure of crisis conditions.

Keywords: Crime; Fraud; Internet; Crisis; Psychology; COVID-19 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-02-2021-0030

DOI: 10.1108/JFC-02-2021-0030

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