THE RISING TIDE OF FINANCIAL CRIME- PONZI SCHEME: A PROFILE ANALYSIS OF VICTIMS

Abstract

Financial crime in the form of Ponzi schemes continues to pose significant socioeconomic and psychological consequences, particularly in developing communities where trust-based networks strongly influence investment decisions. This study examined the demographic profiles, contributory factors, and lived experiences of Ponzi scheme victims in Barangay Santa Ana, Nasipit, Agusan del Norte, Philippines. Anchored on Greenspan’s Theory of Gullibility, the research employed a qualitative descriptive design. Fifteen victims were selected through purposive sampling and participated in semi-structured face-to-face interviews. Data were transcribed, translated, and analyzed using thematic analysis supported by NVivo 14. Findings revealed that victimization transcended age, gender, educational attainment, and income levels, indicating that demographic variables alone do not sufficiently explain fraud susceptibility. Three primary factors influenced participation: testimonial persuasion within kinship and community networks, enticement of unusually high financial returns, and limited financial literacy. The consequences of victimization were categorized into three overarching themes: incapacitated financial situation, emotional and mental disturbance, and positive reframing. Participants experienced prolonged indebtedness, insomnia, guilt, and loss of institutional trust; however, many demonstrated resilience through cognitive reframing and work-centered coping strategies. The study contributes to the limited Philippine-based literature on Ponzi scheme victimization by foregrounding victims’ perspectives and emphasizing the interaction between relational trust and psychological vulnerability. The findings underscore the necessity of community-level financial literacy programs, strengthened regulatory enforcement, and psychosocial support mechanisms to mitigate recurring fraud victimization.