Fraud On The Rise: How to Prevent, Report and Recover
The ACFE (Association of Certified Fraud Examiners), the world's largest anti-fraud organisation, recently published its 2022 Report to the Nations with the results of a comprehensive study of 2,110 cases of fraud across 133 countries. The report estimates that, on average, an organisation loses about 5% of its annual revenue to fraud each year. This causes a median loss of US$117,000 before the fraud has been detected. Therefore, taking action to combat fraud is of utmost importance.
The data shows that fraud continues to be on the rise. Over the past couple of years, we gave various seminars and webinars, and published numerous articles on the topic of fraud prevention, detection and recovery, which are listed further down below. Ravenscroft & Schmierer frequently acts for clients on fraud cases and advises on how to prevent it.
Occupational Fraud 2022: A Report to the Nations®
In particular, the coronavirus pandemic created new opportunities for fraudsters. To develop effective tools for prevention and detection, and to implement a plan to respond when fraud has been detected, organisations must understand how fraud is committed within their industry.
Do not answer calls from unknown numbers, report suspicious emails
There is a simple rule to reduce the risk of fraud. Do not answer calls from unknown numbers, report suspicious emails. If the number of the caller is not saved in your phone book, do not answer. If you are expecting an important call and you are worried to miss it, do not worry. If you miss the call, that person will almost certainly leave a voice message, call again, send you a text message or email. If you receive a suspicious email, report it immediately. While most people recognise a fraudulent call most of the time, it can be harder to detect a fraudulent email, as fraudsters are becoming more sophisticated and can hack into the emails of clients, colleagues or business partners. Therefore, strong cybersecurity protection and frequent training for all staff are essential.
Fraudsters use call forwarding services to hide their numbers
Depending on the jurisdiction you are located in, fraudsters may make use of call forwarding services to hide their numbers. At the same time, the number might show up on your screen as coming from a certain country, when in fact the fraudster is located in another country far away. While the European Union has introduced legislation to make this practice much more difficult, you could still fall victim of this trick, depending on your location. It is important to be aware of this, to recognise fraudulent calls more easily.
Get a lawyer, or write an official complaint letter by post and follow up
For large losses, it is always advisable to hire a lawyer, because it is often possible to recover at least some of the money. If the amount of money you lost is not high enough for it to make sense to hire a lawyer, there are other options you can pursue. The bank through which the transactions were processed might argue that they were not at fault, that there is little they can do now and that the case is closed. In that situation, do not take their “no” for a no. Keep going. Write another formal letter and send it by post. Do not give up until you get a response from someone senior at the bank, rather than from a relatively junior case manager or analyst.
(German version here)
Speak to friends, raise awareness by contacting the press and politicians
After having fallen for a fraud or scam, it is common that the victims feel stupid, embarrassed and want to keep the matter to themselves. However, unless you are a large corporation or a well-known individual and have strong reasons to avoid possible negative media coverage, contact the press and politicians anyway. Chances are, somebody has an idea to help you that you have not yet thought of. At the very least, you are helping to raise awareness and reduce the risk that more people fall victim to the fraud or scam. Also, speak to your family and friends. It is likely that they have been a victim of fraud before, or at least know someone else who has, and will be able to offer support in some way or another.
The Tinder Swindler and other fraud schemes: first aid and prevention
Even if you think that the amount of money you lost was too small to make headlines, it is likely that you will find someone interested in your story. While it could be the case that your money is lost, you can still raise awareness and put pressure on the bank or payment services provider through other channels. If you contact the press and politicians, keep your first message or email short. It should be possible to read it in one screenshot on a mobile phone. Then follow up by email and phone. This can be a numbers game, so expect that not everyone will reply. Nonetheless, unless you raise your voice, you will not achieve much, and perhaps your story will be part of the next Netflix documentary and you helped stop another Hunter Moore or Simon Leviev. Also remember, you can request to remain anonymous.
Always contact at least one lawyer
No matter how much you lost, contact a lawyer anyway. Ideally contact a few. They will be able to give you a preliminary quote and let you know whether or not it makes sense to pursue further legal action.
Report the Fraud
In Hong Kong, the Office of the Privacy Commissioner for Personal Data operates a fraud prevention hotline and calls on members of the public to avoid disclosing any personal data arbitrarily. Suspected fraud cases can be reported by calling +852 3423 6611.
Disclaimer: Whilst every effort has been made to ensure the accuracy of this article it is general in nature and does not constitute legal advice of any kind. You should seek your own personal legal advice before taking legal action. We accept no liability whatsoever for loss arising out of the use or misuse of this article.
For specific advice about your situation, please contact:
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