Evolution of Ponzi Schemes and Affinity Fraud in the Digital Age: Impact of Social Media Scams

• In Event: Historical Perspectives on Victimization

Abstract

This study explores the evolution of Ponzi schemes and affinity fraud in the digital age, emphasizing how social media and online platforms have transformed these financial crimes. Fraudsters increasingly exploit digital connectivity to build trust, accelerate scheme proliferation, and target victims across diverse demographics. This research employs a mixed-methods approach, analyzing case studies, regulatory measures, and empirical data to identify emerging trends and risk factors. Findings reveal that social media enables fraudsters to operate with greater efficiency, utilizing influencers, private groups, and encrypted messaging to deceive victims. Additionally, digital payment systems facilitate rapid fund transfers, making enforcement efforts more challenging. Regulatory bodies face difficulties in curbing these crimes due to jurisdictional complexities and constantly evolving fraudulent tactics. Despite efforts to regulate online financial fraud, loopholes and technological advancements provide fraudsters with new opportunities. The study highlights the urgent need for coordinated global regulations, AI-powered fraud detection systems, and comprehensive public financial education to mitigate risks. Increased awareness, proactive policymaking, and advanced technological interventions are essential in combating the rise of online Ponzi schemes and affinity fraud. Addressing these challenges requires collaboration among governments, financial institutions, and technology platforms to create a safer digital financial environment.

Author

• Ojeifoh Okosun, Texas Southern University