Fraud is a crime involving an intentional misrepresentation or concealment of a material fact with the intent to deprive another person of money or property. The underlying cause of fraud is usually an attempt to solve a problem through illegal means. These problems can be personal, professional, or financial. It is a common misconception that fraud refers only to financial crimes, but there are many different types of fraudulent activity. The most prevalent frauds involve theft of money or property and include things such as phishing, identity theft, ransomware, extortion, counterfeiting, embezzlement, forgery, Ponzi schemes, and more.
Fraudsters are becoming increasingly sophisticated and creative in their tactics, which makes it difficult to stay ahead of them. But we can combat fraudsters through a combination of education, community outreach, vigilance, and law enforcement. For example, in February 2024, police and victims successfully took out LockBit, a global cybercrime syndicate responsible for 25% of ransomware attacks in the previous year.
It’s tempting to jump right in and take action when you suspect fraud, but it is important to first determine if there is a sufficient “trail” that suggests the apparent perpetrator may actually be guilty of fraud. This includes emails, transaction logs, bookkeeping journal entries, text messages, and any other records (whether digital or hard copy) that could shed light on the possible fraud.
Careful investigations can reveal weaknesses in an organization’s risk management and also help prevent future fraud. So, it’s vital to invest the time and resources needed to uncover fraud that may be occurring in your business.