Cognitive heuristics and risk evaluation in crisis fraud

Chang, Joshua;Chong, Mark David

Abstract

Purpose: The recent COVID-19 crisis has been followed by an epidemic of fraud. This article evaluates cases of COVID-19 related fraud to identify cognitive heuristics that influence decision making under the pressure of crisis conditions. Methodology: 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: 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.

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Journal of Financial Crime

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1359-0790

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Emerald Group Publishing

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DOI

10.1108/JFC-02-2021-0030