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Why Fraud Happens

hendri — Sat, 07 Jan 2012 22:38:01 +0000

Fraud prevention is one of the most important areas of operation for an organization that has a heavy volume of cash dealings as a part of its business. If there is no robust fraud detection and prevention strategy in place, the organization will be exposed to severe cash crises at regular intervals and this may ultimately lead to a permanent closure or shut down. Fraud needs not necessarily happen within the organizations books of accounts. There are many avenues open through which regular fraud can take place. Accepting money or favors from competitors, vendors or customers with intent to do injustice to the organization or make it vulnerable to operational hazards is also a crime.

Apart from the auditors, there are many other agencies that can detect fraudulent activities in an organization. Shareholders of the company, who take a keen interest in the operation of the organization, also come to learn about these illegal activities and have every right to express their concern in front of the company management. The general public can also file a suit in the courts of law if they have reasons to believe that fraudulent activities are taking place in the company. This shows that it is not just the management of the company or someone entrusted with the financial reporting of the company that has the right to question fraudulent activities.

A question has been raised many a times as to why fraud happens. What is it that instigates a fraud to take place? It must be borne in mind that a fraud is not the direct outcome of the actions of one of the parties involved in the crime. For a crime of this nature to be committed, there has to be necessarily at least two persons – one who is the giver of the money and the other who is the receiver.

A fraud is committed to achieve some personal objectives which are otherwise not achievable. For example a person wants to buy an automobile and does not have the means to do so. He takes the recourse to perform a series of fraudulent activities that help him in collecting the funds needed for the purpose of buying the car. But to do these illegal activities, it is first necessary to convince the other person who would give him the money that this would benefit the other person as well. Only when the giver of the money agrees to the benefits involved in the transaction and acts accordingly it can be said that a fraud has been committed.

Why Banks are a Huge Fraud Attractor

hendri — Sat, 07 Jan 2012 19:07:38 +0000

One of the main victims of fraud happens to be banks. When it comes to fraud the bank can be put at risk by the employees or even by customers. The main objective of bank oriented frauds is to get more money from the bank without having to draw it from ones account and not having to repay the cash.

The bank may have some measures to control some of the fraudulent activities performed by its customers, but the employees may easily bypass the security checkpoints and proceed towards stealing from the bank. Most of the reported cases of fraud that involve the bank usually have one or more senior administrators of the bank involved.

Bank frauds are numerous and fall under a number of categories in the classification of fraud. The services that the bank offers and monetary services draw a large crowd of possible fraudsters. The security of the bank, its employees and money transfer systems has to be upgraded and counterchecked for any possible hitch. When bank frauds occur, there is normally a given employee who is willing to benefit from a transaction or has made a mistake when performing their duties. The prior is a contributor to most of the fraud cases involving the bank.

In most cases the bank frauds are usually referred to as white collar frauds. Although the bank and its employees might be the transgressors in the fraud cases, some fraudsters will establish banks that have names, addresses or even logos similar to an established bank in order to mislead some of the original bank clients and steal from them. This is a crime that is usually referred to as bank impersonation. This type of fraud may succeed with or without the help of the original bank’s employees especially when fraudsters involved take the online route.

There are a number of mechanisms that are used by the banks to protect themselves from fraud. Although in most cases the mechanisms do work, the first step should be to source credible, accountable and trustworthy employees. The tactics of the bank when it comes to dealing with fraud normally involve delaying withdrawals until the client has been confirmed to own the account or to have the original documents to the case. Different banks take on different fraud prevention mechanisms based on their services as well as abilities. As a bank customer, the best way to avoid anyone committing any fraudulent activities based on ones identity is to keep personal and financial information safe.

What You Need to Know about Visa Fraud

hendri — Sat, 07 Jan 2012 15:44:12 +0000

Visa is perhaps the most important document for many travelers. Though diplomatic ties allow certain nationals to enjoy visa-free entry to other nations, this is always not the case in the bigger picture. Many people are spending huge sums of money just to be able to acquire a visa to travel. It is a common knowledge that a chunk of people, especially desperate travellers, end up being scammed by visa racketeers. It may interest you to know that this is usually possible due to the ignorance of travelers.

Therefore, your ability to spot a visa fraud deal would save you time and money. And the good news is that some of the best known ideas for detecting such fraud are organized in this document for your reading pleasure. First off, it is best to process every travel document in person if you can. Many shun that idea for the fear of not being successful. However, those who take that bold step to find the relevant information about the country of destination excel. In todays world of easy access to information, it would be just a matter of going to the webpage of the country in question and taking the relevant information for your guidance.

One thing is that most visa frauds are perpetrated by individuals with little or no known credibility. If youre really serious about getting the right help, you do not have to approach a single individual who does not have any point of solid contact whatsoever. Agreeably there are agencies that are certified and regulated to provide such services. In such situations, the most appropriate thing to do is to check the legitimacy of the provider that you intend to work with. Make sure the right checks are made especially in the event of payments being required.

You may also want to avoid visa fraud by employing the rich experiences of immigration lawyers. This could be a wonderful idea in the sense that you stand the chance of being fought for when youre denied the visa unjustly. Always acquire appropriate visa for the right reason. For instance, you wouldnt want to acquire a tourist visa if you actually needed a work permit visa. In fact this is one of the many tricks of visa fraud dealers who organize a number of people and try to secure them any type of visa irrespective of the needs of the traveler. Be guided!

What are Non-Investment Frauds?

hendri — Sat, 07 Jan 2012 11:52:19 +0000

One of the uprising forms of fraud goes by the name of non-investment fraud. These fraud cases are usually common in online service provision. The fraud is generally described with terms such as swindling. This type of fraud is quite common and usually targets individuals who have no luck or are looking for ways to solve a given problem. The non investment frauds are usually a one way traffic type of fraud. The victim who is the buyer is usually the one at the receiving or losing end, the investor (fraudster) has the winning end. It is a deal that usually has a pretty good advantage for the fraudster.

The intensity of the non-investment frauds is determined by the lengths that the victim is willing to go to get a solution to their case. The common tricks in the industry revolve around the victim making payments for products and services such as miracle cures, increased earnings, high paying jobs, education and products. The fraudster has the task of supplying convincing information to his or her target and waiting for the target group to make their investments in monetary terms, but end up trading no useful information or products in exchange to the investments made. Some of the offered services or products might go to the extent of being harmful to the victim’s wellbeing.

In most cases, the non-investment fraud revolves around monetary gains. The goal of the fraudster is to make as much money as possible from their scam. The fraud case usually ends at the point at which the victim hands in their cash to the fraudster. Once they get the money, they vanish or provide useless products. In some cases the fraudsters will keep a client misled by offering false hopes while drawing more cash from them. The victim is the only individual who has the ability to cut all connections to such fraud cases.

The best way to avoid falling prey to the noninvestment frauds is doing a conducting research on the service provider. Its advisable that one conducts research on the service provider prior to getting into an agreement with them. The scams may extend to fields such as the insurance field and the medical fields. This means that one should try as much as possible to conduct business with only trusted service providers, regardless of the costs involved. The trick in the non-investment frauds is to promise heaven to the victims, which is never delivered.

What are Cashless Frauds?

hendri — Sat, 07 Jan 2012 07:56:43 +0000

One may have heard of a number of ways in which fraud is committed and how it hits the books of accounts of a company, at times seriously affecting the profit. But in some of the most well planned frauds, it has been seen that the books of accounts are left untouched and unscathed. This happens when there is a nexus between the supplier or the debtor and the related department employees. It is easy to show preference to a specific supplier by favoring him with priority orders at prices that are different from those which are quoted by other suppliers. This is one way of usurping the price difference, conveniently putting other suppliers virtually out of the supply and logistics chain.

Pretty much the same is the case with preferential debtors who are issued credit notes at special request so that part of their outstanding balances gets written off as faulty shipments or similar fabricated things. The credit notes and supplier bills are quickly converted to the nearest available currencies and the profit is shared and the company loses revenue.

Competitive pricing and fair market values are thrown out the window. Understandably, the auditors would be doing their job during the statutory audit of the company accounts, resulting in criminal proceedings too but at the end of it all the financial loss can never be compensated. Sooner or later, the company comes crumbling down with unprecedented problems. People may lose their jobs and may be asked to leave till things are back on track once again.

Fraud is defined as the misuse and the misappropriation of funds. This can be done by an individual or a group of individuals to achieve some specific selfish objectives. In more instances than one the fraudster gets caught and the law proceeds to take care of the formalities. There have been scores of cases in which a careful dressing up of the accounts of the company has fetched good incomes. Software companies do this with the idea to claim more tax rebates and reliefs from the Government. In turn the Governments treasury becomes empty and the gullible public is forced to pay extra taxes to make up the difference.

Everybody needs cash. But a fraudulent way of getting it is not right. By following a fraud route to more cash, the person endangers himself to be dealt with by the authorities. The person is at risk of severe penalties imposed by criminal laws that can ruin him and his family for life.

Watch for Online Dating Frauds

hendri — Sat, 07 Jan 2012 04:34:24 +0000

Frauds have become quite common in recent years. There are different forms of frauds extending to different and sometimes unexpected fields. One of the common and uprising fraud cases is the online dating fraud. The fraud may be a simple distortion of the truth causing minor monetary damages, while in other cases it might cause major financial and emotional losses.

When it comes to the online dating frauds, the target audience normally includes individuals who are interested in socializing via the internet. There are different variations to the online frauds although most of them are rather basic. The fraud must be conducted online, though in some cases a physical meeting might be arranged.

The process of the fraud involves the fraudster creating a false account or accounts on a given dating site. The information posted will then be matched to the general wants of the targets. Some of the attributes such as tall, dark and handsome might be directed towards women. To draw the victim, a profile picture that is appealing to the eye is used to grab the users attention.

The account holder (fraudster) will be very friendly to the user and stimulate the conversations tending to befriend the user. Later on the account holder will ask the counterpart for a favor that involves finances. The favors commonly used include giving the fraudsters a loan that has to be repaid after a given amount of cash has been transacted. The involved transaction may be made by the user revealing some of their bank information. One may also be requested to pay for a flight ticket for the supposedly new found love. Although one may not be asked to send the fraudster some bank details, one may be asked to send the individual in question the money directly to resolve a given issue.

Although individual account holders are responsible for the frauds, some websites are being developed with the same intent. The case of the websites is however different with a few variations. The sites are usually created with a number of host members who are AI characters. The artificial intelligence characters will send invitations, flirts and messages to reflect the success of the dating site. The aim of such methods is to get the members to pay for premium membership. In most cases the registration to the site is free of charge, but the activation of the account requires one to pay some cash. This is common in the adult dating industry.

Understanding Corporate Fraud

hendri — Sat, 07 Jan 2012 00:53:24 +0000

Of the different frauds present, corporate fraud is termed as the crime that is generally carried out by a corporation enjoying profit or by any individual inside the corporation. Individuals who generally commit this type of crime usually belong to the higher-level management as they have good amount of power in their hand and make most of the decisions for the corporation to excel. The crime which is committed has an adverse effect on different sections of the corporation and also on investors irrespective of the amount they invest.

In general, corporate crimes are usually divided into three different categories as mentioned below.

1. White-collar crimes – these particular crimes usually involve individuals belonging to a larger corporation and professionals who usually take a higher position in the corporation.

2. Organized crime – these are usually criminals who set up corporations for the main aim of money laundering. The money is generally obtained from criminal activities. This particular category has seen a tremendous increase over the recent years because it allows for the utilizing of illegal money.

3. State corporate crimes – speaking of certain contexts, a fraud which has been carried out by a corporation involves even the state government as there is a legal relationship between the two parties.

Though there are many individual steps which are carried out by a corporation, it completely depends upon the authorities and their involvement to implement the necessary laws. Many companies are finding different ways for implementing them in order to protect themselves from corporate fraud. The basic step that can be taken is to identify the different categories and classify them accordingly. An activity which violates ground rules of the corporation or is a direct threat to the public or the corporation is also classified as fraud.

The best way to protect a corporation from falling prey to a corporation fraud is by appointing whistle blowers within the corporation. The main aim of a whistleblower is to provide information about the incorrect activities that are being carried out within the corporation from time to time. Such an action will easily help the corporation to prevent any occurrence of corporate fraud which may hamper the overall reputation of the company and also pose a serious threat to the public. The revelation is generally carried out discreetly in the presence of law enforcement authorities in order to provide complete protection to the whistle blower.

Two Types of Insurance Fraud

hendri — Fri, 06 Jan 2012 20:53:43 +0000

Fraud is generally considered to be a distortion of the truth in order to put a certain individual or corporation at an advantage which can be either monetary or have any other form of benefit. There are a lot of fraud cases in the courts every year, but the most famed ones involve insurance companies. The insurance fraud cases are usually as a result of a claim being made by the policy holder, with the statements in the claim being false, or else the insurance company failing to meet its true obligations. Although the insurance companies are mostly considered to be at fault, the claimant might be fabricating the statements in the claim and this also constitutes fraud.

Insurance frauds can be customer or provider oriented. The policy holder may be looking to cash in their policy via fraud or a given individual or association of people may be looking to defraud customers of their hard earned cash. When it comes to insurance holders, the fraud cases are usually categorized as either hard or soft frauds. The hard frauds are usually cases in which the insurance policy buyer makes up or creates a situation to force the insurance company to settle the bills.

The insurance holder may provide for the event leading to the loss such as a fire or vehicle collision to make the company involved settle the agreed sum in the insurance coverage. The soft frauds are the more common forms of fraud and are usually referred to as opportunistic frauds. In this case the policy holders usually exaggerate the loss in a legitimate insurance claim so as to gain more financial benefits to cover any damages.

Insurance claims are quite common in both the corporate and personal spheres. There are adverse effects of the insurance frauds such as the suffering of innocent people and thus most of the policy holders use the help of legal experts to settle their issues with their insurance providers. The terms of the insurance provision in most cases are quite tough so as to minimize the payments made by the company. Due to this the cases are usually reviewed and every possible route explored.

Insurance companies usually employ the services of expert analyzers to avoid paying their customers. The insurance companies will ensure that the case is exhausted to the maximum to minimize the associated payoffs. The best way to avoid falling prey to an upcoming insurance service provider is to conduct some research on their existence or simply get a policy from an established provider.

How to Avoid Telemarketing Fraud

hendri — Fri, 06 Jan 2012 17:48:03 +0000

Telemarketing fraud is when a fraudster gets money from you over the phone. Basically, they call you and give you offers that seem too good to be true and ask for your financial information. Such callers are usually in a hurry to make you pay for the products that they are offering and often make it seem as if you need not confirm or verify the company from anywhere else.

Other fraudsters will call and say that you have won a prize or even the lottery. However, they would need you to cover the mailing and postage costs. This involves either sending them money or giving them your financial details over the phone. Others even offer to collect the payment through courier services from your doorstep.

It is not hard to avoid telemarketing frauds, as all you have to do is to hang up the phone when anyone asks for your financial information. It is very important to note that your contact information is spread from one telemarketer to another through third parties. Therefore, it is hard to actually escape such callers. It is also important to note that financial information should not be exchanged during phone calls especially if you are not the one who made the call.

Verifying the companys legibility before giving them your personal or financial information is important and so is making phone calls to the company telephone number given on their official website. This is necessary to confirm that the person you are dealing with actually works for the company and they are aware that the person is conducting financial deals on their behalf.

If you have not been participating in the lottery there is no way you can win it. Moreover, no legitimate company will charge you for mailing and postage to send you your prize. It is therefore very important to be suspicious of such offers. Victims of such frauds are still victimized, as there are still fraudsters who come in pretending to help out. Yet all they want is your financial information and they then reuse it to steal from you.

It is important to take your time before going for any investments. You should not be in a hurry to give your information without first discussing the deal with close family members or other trusted individuals. This will give you different opinions, which are useful in such decision making.

The most important point is to ignore those offers that you do not understand completely.

The Fraud of Identity Theft

hendri — Fri, 06 Jan 2012 13:56:19 +0000

One of the most common forms of fraud is identity theft. A huge number of fraudulent activities usually do not require the thumbprint of the information source especially with the electronic means of trade and business conduction. Fraudsters usually take on this weakness in the telecommunication system to conduct fraudulent activities.

The theft of personal data such as credit card information, passwords and email addresses usually leads to the information obtainer engaging in activities without the consent of the owner. Cases of identity theft are widespread. Personal information can be stolen via a number of institutions extending to the bank. The goal of the fraudsters in these schemes is to gain monetary benefits from posing as a specific individual.

Impersonation of a given individual is easy to some level, but relatively unachievable in some cases. The cases involving impersonations have increased in number as time proceeds and thus it is important that one is careful about making personal information available to all. Some of the modes used to get information from a given source are relatively soft. Some of the schemes may be innocent at first but proceed further to a criminal form. The internet based services are the most susceptible to the fraud as in most cases the data required from an individual may be easily obtained.

Sourcing information that could be used for impersonating an individual is a process that usually involves a target. Its impossible to know if one is a target of such fraudsters and thus its always advisable to keep ones information as secure as possible. Some of the activities such as throwing away loan documents, receipts or bank statements may easily put one at risk of being a target of a fraud. When dealing with worksheets that have personal data such as financial billings, birth dates, parents details and passwords, complete destruction of such documents is important.

Prevention of identity theft is a process that simply involves the person controlling the availability of their information. One should thus not participate in any activity that involves conveying personal data unless they are certain about its safety. One should also keep details and data protected by a lock, a key or passwords for the electronic devices such as a PC. If its possible, one should always ensure that they deal with a given trusted client.