Ponzi Schemes and Affinity Fraud in Developing vs. Developed Economies: A Cross-Cultural Analysis

• In Event: Place, Space, and Victimization

Abstract

This study examines Ponzi schemes and affinity fraud as financial crimes that exploit trust and social networks, comparing their prevalence, impact, and mechanisms in developing and developed economies. The research investigates how socio-economic factors, regulatory effectiveness, and cultural influences shape fraud schemes and consumer susceptibility. Using a mixed-methods approach, the study analyzes case studies, regulatory frameworks, and empirical data to identify patterns and risk factors across different economic contexts. Findings indicate that weak financial literacy, limited regulatory oversight, and economic instability in developing economies create fertile ground for large-scale fraud, while in developed economies, fraudsters leverage complex financial instruments and digital platforms to evade detection. The study concludes that combating these crimes requires a multi-faceted approach, including enhanced regulatory coordination, financial education, and technology-driven fraud detection systems.

Authors

• Ojeifoh Okosun, Texas Southern University

• Declan Onwudiwe, Texas Southern University