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The purpose of this paper is to highlight the causes of fraud in rural banks in Indonesia and provide recommendations to reduce these financial crimes.

This paper is desk research using secondary data from research reports, journal articles, magazine articles and online news related to fraud cases in rural banks. The Fraud Diamond approach is applied to analyze the problems.

Financial and non-financial pressures, opportunities that are open because of weak oversight and governance, justification of fraud and the capability of perpetrators are the factors that cause bank fraud. Opportunity is the most significant contributor to fraud.

The novelty of this paper is that it discusses the causes of fraud in rural banks. Management and authority can learn from this case.

This paper aims to highlight the corruption mode of village funds in Indonesia and provide recommendations to reduce such crime.

This paper uses Diamond Fraud theory to explain why the mode of corruption continues, using secondary data from journal articles, research reports and websites.

Corruption mode is carried out through fund misuse, cover-up, fictional reports, fictitious activities and projects and budget markup.

Prevention and detection of fraud can be more effective when considering pressure, opportunities, rationalization and individual abilities.

The novelty of this paper is to provide a more comprehensive view of the factors that can lead to fraud or corruption using the Fraud Diamond Theory.

This paper aims to highlight the existence of illegal peer-to-peer (P2P) lending in Indonesia, unethical practices of P2P lending operators to borrowers, regulatory weaknesses and offer recommendations to reduce unethical practices.

This paper is a general discussion through desk research using secondary data from journal papers, research reports, books and papers online.

There are regulatory weaknesses in regulating illegal P2P lending. There are no strict legal sanctions for P2P lending operators who act unethically to borrowers.

This paper discusses the unethical actions of P2P lending operators and the inability of regulations to take legal action against illegal P2P operators.

This paper aims to identify psychological factors that influence people to be involved in Ponzi and pyramid schemes.

A psychological approach to finance or behavioural finance is applied in this research because of the assumption that human beings are not always rational. The sample consisted of 98 investors in 11 cities in Indonesia who were or had invested in an investment program with a Ponzi or pyramid scheme. The snowball sampling technique was applied.

The conclusion is that optimism (emotional bias), confirmation bias, representativeness bias, framing bias and overconfidence (cognitive bias) positively influenced investment decisions related to Ponzi and pyramid schemes.

The novelty aspect of this research is the implementation of a behavioural finance perspective to answer and express the fascinating phenomenon of Ponzi and pyramid investment schemes.