Common types of fraud against businesses

Fraud is a deliberate act of deception intended to secure an unfair or unlawful gain, or to deprive the target of a right or something else. Legally, fraud can be both a civil tort and a criminal offense, and it can include many different forms and shapes of deception - always evolving - such as various forms of false representation, misinformation or hiding facts, and deceitful conduct in general. In this article we give you the must common ways that businesses become victim of fraud:

• Fake invoices

  • Scammers send fake invoices for products or services never ordered or received, hoping the business will process the payment without verification.​

  • Example: A small business receives an invoice for office supplies it never ordered. Without proper checks, the business pays, unknowingly falling victim to fraud.

    
    

• Disguised "subscription"

  • One type of invoice fraud is where something that looks like an ordinary invoice is sent to your company – but in the fine print it says that it’s a subscription - an offer - that you sign up for by paying.

  • These setups also give a good example of demarcation issues between unethical and unlawful ways to conduct business. If it is sufficiently clear that this was not an invoice but you where in such a rush and your accountant assumed you wanted it paid - then chances are you will not be able to claim fraud and instead feeling that you through money down the drain.

    
    

• Chargeback frauds

  • This is where the criminal buys something using a credit card and then dispute the credit card charge with the card issuer, claiming that he or she never received the product or that it was faulty.

    
    

• Credit card fraud

  • Credit card fraud is one of the most popular types of identity theft and fraud. It is defined as the unauthorized use of an individual's debit or credit card to transfer money to the criminal by using the card for various transactions.

    
    

• Advance payment fraud

  • Advance payment fraud is when a thief requires you to send money in advance for payments, products, or services but once you have paid you never see any product or service and when you seek the vendor there is no reply no matter how hard you try.

To see the full list of the most common types of fraud along with a checklist on how to protect yourself, check out our article here!