Types Of Fraud

Fraud Defined

Fraud is a criminal offense that uses deception or theft to achieve financial gain. Offenders gain the trust of potential targets by intentionally misleading, omitting, or misrepresenting facts to take advantage of this trust. In many cases, the victims do not discover the fraud until much later.

Types of Fraud

There are various types of fraud, but all involve deception as the main behavior. The most reported fraud complaint is illegal debt collection. Identity theft is the second most reported complaint. Other types of fraud include the following:

• Credit card fraud

• Insurance fraud

• Mail fraud

• Securities fraud

• Tax fraud

• White-collar crime

Personal Fraud versus Business Fraud

Although personal fraud is the most

In all situations there are three components. One is pressure or a need for money. The second is opportunity and the third is rationalization. When company rules or policies seem unfair, an employee may decide to break them. An employee may defraud the company because he has a huge debt or desires things he can’t affords, while also feeling that the company doesn’t treat him well or fairly. Another example is that a company imposes quotas and an employee turns to unethical or fraudulent activates to meet this quota because her job depends on it. In other cases, am employee is asked to engage in fraudulent behavior by the company owner or manager, and if he doesn’t comply, he loses his

It all depends on the severity of the crime. Did the offender cheat senior citizens out of their life savings or did he pretend to be from a collection agency? A felony is more serious, and with a conviction, the jail sentence is at least a year. For federal charges, jail time can be more than 10 years. Misdemeanors have a sentence of up to one year in jail. In addition to jail time, other possible penalties include fines, and paying back the stolen money.

One impediment of online fraud is that the offender could be located in a foreign county, which makes it harder to locate the criminals and prosecute them.

Common Fraud Tactics and Warning Signs

Many fraud offenders use the same strategies again and again. If people learn to recognize these common tactics, they are less likely to become victims of fraud. With foreknowledge, it’s easier to spot potential fraudulent behavior by knowing the warning signs.

Here are a few of the most common tactics.

• Obtaining personal information such as social security number, mother’s maiden name, former addresses by misrepresentation

• Getting money directly by pretending to represent a real or fake charity

• Pretending to be a relative who need of financial help

• Sending a person a check for more than is expected, and asking for money to be sent back after depositing