According to our research, about 1 in 15 people1 fall victim to fraud every year. The word covers a wide variety of crimes, conducted for any variety of reasons – but all involve the same basic thing: the use of deception for personal gain. Sometimes that deception is so sophisticated it's extremely hard to detect – which is why around 49% of businesses2 found themselves victims of fraud in 2017, with 14% of those surveyed3 saying that they'd lost at least $1 million to fraud incidents.
If somebody is pretending to be someone they're not, or if they're engaged in an activity that they shouldn't be, and profiting by it, then they may well be committing some kind of fraud. This makes fraud a bit of a catch-all term for various forms of both real-world and cybercrime, including elements of both tax evasion and money laundering.
The impacts of fraud are substantial – in its various forms, fraud is estimated to cost the global economy as much as $3.2 trillion every year4. Individual consumers in the US are thought to have lost a total of $905 million5 in 2017 alone.
There are many different ways of committing fraud, but it can involve:
Fraud often depends on human weakness, with fraudsters using psychological tricks to exploit individuals – often tailored in a very personal way to gain access to information and systems they can then exploit. This means one of the best ways to counteract it, is for everyone to learn how to spot and take actions that limit how fraudsters can exploit us. These steps include:
Banks are also working to help prevent fraud by flagging up suspicious transactions on customer accounts – which is why you may occasionally find your cards locked. But even with today's high-tech fraud detection systems, not every fraudulent transaction will be spotted by banking software – fraudsters are getting very good at hiding their activities.
This means you should also check your bank statements and flag any suspicious activity as soon as possible for your bank to investigate. Not only could that help protect your money – it could help save other people from being put at risk as well.