An analysis of advance fee fraud on the internet

Authors

Joshua J. S. Chang, University of WollongongFollow

RIS ID

22705

Publication Details

Chang, J. (2008). An analysis of advance fee fraud on the internet. Journal of Financial Crime, 15 (1), 71-81.

Abstract

Purpose – Advance fee fraud on the internet is a current epidemic that rakes in hundreds of millions of dollars per year. The advent of the internet and proliferation of its use in the 1990s makes it an attractive medium for communicating the fraud, enabling a worldwide reach. This paper aims to explain how advance fee fraud operates, to examine various cases of recent advance fee-fraud e-mails, and to identify methods employed to manipulate victims into compliance based on theory in human behaviour and persuasion.

Design/methodology/approach – This study uses six cases of advance fee fraud received via e-mail by the author between August 2006 and January 2007. The content of these e-mails was analysed in detail to identify the methods employed to manipulate the behaviour of victims.

Findings – Interpretive findings suggest that advance fee fraudsters employ specific methods that exploit the bounded rationality and automatic behaviour of victims. Methods include assertion of authority and expert power, mimicking and referencing persons/organisations, providing partial proof/legitimacy, reasoning, reciprocation, creating urgency, and implying scarcity.

Practical implications – While there is readily available information on advance fee fraud on the internet, especially in the web sites of anti-fraud organisations, this study suggests a need to inform internet users of the methods employed by advance fee fraudsters.

Originality/value – Considering the current and widespread problem of advance fee-fraud e-mails, the information of this paper is important for internet users to improve their capability in identifying fraudulent schemes and avoiding them.