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Is financial literacy a protection tool from online fraud in the digital era?

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  • Isaia, Eleonora
  • Oggero, Noemi
  • Sandretto, Davide

Abstract

Cybercrime increased dramatically during the Covid-19 pandemic, when people’s online exposure rose significantly. In this paper, we analyze the relation between being a victim of online financial fraud and financial literacy, using representative Italian data collected in 2020. We find that basic financial knowledge is negatively associated with the probability of being defrauded online, while individuals who are overconfident about their level of financial literacy are more likely to fall victim to fraud. Moreover, those who were forced to work remotely because of the pandemic experienced a higher risk of fraud, that was reduced by financial literacy. Our findings suggest that financial literacy may provide protection against online fraud even in a context of high online exposure.

Suggested Citation

  • Isaia, Eleonora & Oggero, Noemi & Sandretto, Davide, 2024. "Is financial literacy a protection tool from online fraud in the digital era?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 44(C).
    • Handle: RePEc:eee:beexfi:v:44:y:2024:i:c:s2214635024000923
    DOI: 10.1016/j.jbef.2024.100977
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    More about this item

    Keywords

    Online financial fraud; Financial literacy; Financial literacy overconfidence; Remote working; Covid-19;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection

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