THE INFLUENCE OF FINANCIAL LITERACY LEVEL TO THE INVOLVEMENT IN FINANCIAL FRAUD

• Main Author: GENTA PERDANA/ 29116241 , WREDA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/31678
• Institution: Institut Teknologi Bandung

There are many of The Umrah travel services companies in Indonesia offering very cheap Umrah religious trips, it makes competition between the Umrah travel agency is very tight and tends to unhealthy competition. There have been several Fraud cases arises, one of an emerging issue or case is First Travel. However, the OJK believes that the occurrence of fraud is due to the low knowledge of financial literacy by customers and pilgrims. The research is using questionnaire for collecting data that relies on factors related to Financial Management and Financial Decision. These factors are Demographic Factors (Sex, Education Level, Age, Marital Status and Number of Children, Employment, Income, and Level of Risk to Take Risks.), Savings Habit Factor, Financial Literacy Level Factor, and Behavioral Factors (Overconfidence Behavior/Certainty Effect and Framing Decision/Framing Effect). The decision making assessment includes questions about victimized by financial fraud as measured by the participant's vulnerability to fraud, the participants' financial understanding of financial literacy and confidence in answering it, and financial risks. The number of victim samples used for this study was as many as 100 people, with the total victims being handled by a law firm that provided data for this study which was 250 victims. An additional 50 people who were not victims of First Travel fraud or those who have worshiped Umrah use umrah travel services other than First Travel as a comparison for respondents who are victims of fraud. Out of five regressions from control variables and research variables, education shows a robust negatively significant impact to the probability of fraud victimization. People that showed certainty effect bias also has a significantly higher fraud victimization probability when it is regressed only with the other research variable. People that showed framing effect also has a significantly higher fraud victimization probability. The government is expected to be able to make programs that can inform the public of the importance of calculating behavior and consideration of finances. The individual had to increasing the level of education for themselves, increasing awareness of financial fraud patterns, as well as the individual is need to change decision making behavior.