Fraud happens! - a look at some of the reasons why

Why does fraud occur?

It is possible to liken fraud to a terminal disease. You know how bad it is, you know that it happens to a lot of people a lot of the time - yet you never think it is going to happen to you. A little extreme perhaps, but people are simply complacent when it comes to the threat of fraud to their personal lives or to their businesses.

Complacency must be one of the biggest reasons that the fraudster gets to ply his or her trade (actually it is more likely to be a male fraudster that is conning you - as much as 90% of all frauds are committed by males). We throw our documents into the bins with details of our names, addresses and often much more. We enter into contracts without carrying out proper due diligence. We are attracted by the offers of easy money or incredible bargains. We fail to check the security of our financial controls.

In short we are in such a rush to make money in our hectic 21st century lives that we often miss all the warning signs. We don't make fraud a priority - a failing that we have in common with the law enforcement agencies. Fraud is not a proirity for the police because a modest case can take several persons months or years to solve and bring to court - resulting in one statistical tick in the box, whereas the same resources can clean up many break ins, thefts and other more easily dealt with crimes. So many more ticks in the boxes and unfortunately this is the way that regional forces are judged. Crimes such as rape, murder and drug trafficking are considered to be more serious than fraud and do comand the appropriate resources, but many of this that fraud should also be added to this list.

So we make it easy for the fraudster. This leads on to another reason why fraud is so prevalent around the world today. I will illustrate with a recent interview I held with a senior finance director in a global construction firm. He said "...Mark, can you see this cheque book sitting on my desk? I could write a check for $10,000,000 today (it was a Friday) and be in Panama next week spending the money..." He also said that he could never return home without plastic surgery and a change of identity but his point was that a major fraud was easy for him to commit in his position of trust.

So complacency and the ease with which fraudsters are able to commit fraud are the basic reasons why it happens time and time again. We can never know its scale because fraud is a hidden crime, bubbling away beneath the surface.

Private fraud investigation resources are often called upon to assist with the investigations of fraud, usually after it has happened. Much better if they were called in when everything is ok and asked to advise on the weaknesses that make fraud so easy in many cases!

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Comments 4 comments

ChloeAliceWilson profile image

ChloeAliceWilson 6 years ago from Spain

Prevention certainly seems the best option but I guess most people don't think it's important until it's too late. Fancy men being so dodgy - shocking!


Mark Jenner profile image

Mark Jenner 6 years ago Author

Thanks Chloe - you are right, 90% of fraudsters are men!


prasetio30 profile image

prasetio30 6 years ago from malang-indonesia

we have to be aware with many things around the internet. Don't pay anything before you search some information. maybe it sound legitimate but unfortunately it also scam or fraud. nice topic Mark!


Honomoto 21 months ago

You can dispute the chrgaes with the credit card company, close the account and hope they will remove the chrgaes. This isn't always so easy though because what would stop me from going to Best Buy, buying a $1,000 TV and then go to my bank and say my card was stolen and didn't charge the TV. So in essence I would be getting the TV for free. That is a reason a bank would be reluctant to do anything.People steal your identity by finding out your name, birthday and social security number. They take that information and get credit cards, loans and other things in your name. The protection is up to you. You have to make sure to protect your credit cards, your birthday and social security number from people that doesn't know you. Its not up to anyone else to protect you.

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