Fraud – The magnitude of the problem by Mike O’Sullivan

Fraud is a huge problem. And it’s getting worse! Fraudsters are becoming more sophisticated and determined. The sums of money stolen as a result are increasing and devastation caused to targets of fraud is real and long lasting.

We’ve all read stories about people being ripped off for their life savings and we are exposed to constant messages warning us to keep our personal details confidential and to be very careful who you speak to about your finances.

A lot of people feel that they aren’t rich enough to become a target for fraudsters. The simple truth is, if you have £5 and there is a way of stealing it from you, you are a target!

So, if you with your £5 are a target, it doesn’t take much to work out that no individual, company or business of any kind, is immune from being targeted by fraudsters. I witnessed someone pick change off a table in a café where a blind customer was having breakfast. Seeing someone stealing from a blind person so casually was certainly unexpected! This tells us that there are no morals restricting the levels to which some people will stoop when presented with the opportunity to steal.

Going out and stealing is hard work, risky and involves the thief having contact with their targets.

Stealing remotely, by fraud, is potentially more rewarding, in terms of return for effort, less risky and usually involves zero direct contact with potential victims.

Dealing with a faceless foe is challenging and gives great satisfaction when they are thwarted. Your business will be a target of fraud whether you are aware of it or not. If you are not checking, you don’t know, if you start checking you will find anomalies.

Thwarting a fraudster will just see them move on to the next target, which is why awareness and education is so vital in combatting them, and why dedicated financial crime experts are needed to detect and deal with threats in the first place. Awareness and education will help the next target – but fraudsters will evolve. So, awareness and education should evolve as well, which is why TPSO constantly harp on about the importance of CPD.

However, fraud awareness, detection and prevention should be considered part of a business culture rather than ‘someone else’s job’!

The stores manager who orders extra toilet rolls so that they can take some home can cost a business hundreds over the course of the year. Undetected fraud leads to more, its human nature. So before long the storeroom manager is ordering extra supplies for family members and starts bringing their car to work to load it up. Next comes the market stall and stealing to order. All paid for by an unsuspecting employer. I’m using real life examples that I’ve experienced directly during my career.

Little frauds combine to cost an employer a lot. Fraud is by its nature, discrete and very difficult to detect. The costs aren’t realised by a business until it is detected and investigated.

Whether or not you want to pursue a career in financial crimes, fraud prevention or similar, being aware of fraud and having the ability to recognise and detect warning signs that are often right in front of you, can make the difference between you, as an individual, and your employer or client, being ripped off.

Mike O’Sullivan