March is Fraud Awareness Month. The purpose is to increase public knowledge of how fraud impacts our lives, what the most prevalent frauds are, how to recognize them, and what to do if you are a victim of fraud.
Fraud losses
There is a misconception that fraud, in its many forms, is a cost of doing business. In fact, the Association of Certified Fraud Examiners estimated in their 2022 Report to the Nations, that business losses from fraud were 5% of a business’ gross revenue. These losses can occur through credit card fraud, policy abuse, collusion between buyers and sellers, payroll fraud, and asset misappropriation, to name a few forms of fraud. Corruption was the most common form of fraud reported in the ACFE Report to the Nations.
The Canadian Anti-Fraud Centre reported that while 30,000 fewer frauds were processed in 2023, the losses were $23M higher than in previous years, and those were just the fraud cases that were reported. It is estimated that less than 10% of fraud cases are reported in Canada every year.
A 2019 survey by Statistics Canada indicates that fraud is more widespread than we would like to believe. The survey showed that 7.8% of Canadians had been victims of fraud in the twelve-month period before the survey. In fact, the survey results indicate that fraud is the largest crime we have in Canada.
A change in perspective
As part of fraud awareness, we must change our mindset about fraud.
1. Instead of believing that fraud is a cost of doing business, businesses need to prosecute fraudsters.
2. We also need to start treating fraud as a crime, just like any other crime.
3. We need to remove the stigma of fraud. If you are a victim of fraud, know that it is not your fault.
4. Finally, we need to report fraud to the police. Police cannot investigate crimes they do not know about.
What type of fraud concerns you the most?
A) Credit Card
B) Investment
C) Identity
D) Other
Kathleen O’Donoghue, CFE
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