KYC

How to predict fraud

Everyone can become a victim of fraud. Want to make the chance of you becoming frauded smaller? Learn to predict fraud in this Creditro Article.


All businesses can be affected by scams – in different places, and different ways. So how do you spot the scammer? How do you protect yourself from the criminals who in more than half of all fraud cases work in the company they are scamming against? Read on and get ready for fight.

Virtually all companies will be affected by fraud to a greater or lesser extent. Some of the questions most people have after being scammed are who did it and whether it could have been foreseen.

A study highlights some of the most prominent characteristics of a fraudster:

  • Between 36 and 45 years old
  • Employed in a trusted position (29% are directors)
  • That they have been with the company for more than six years

The investigation also shows that in over half of the cases, the fraudster works in the same company as the target and that in approx. 70% of the instances do not work on the fraud alone.

 

After the financial crisis, the motive to defraud became greater

After the financial crisis in 2007/2008, which hit many people and companies hard, the motivation to defraud became greater. It happened as more and more people became financially stressed and had to find a creative way to raise money. Due to the increasing number of scams and frauds, burden companies have secured their control systems better.

However, this was not the case as the companies were also looking during the financial crisis. This meant that many companies chose to cut back on the control systems due to the economic situation to ease the pressure elsewhere in the company. This thus provided better working conditions for the fraudsters who struck in droves.

 

Use of the Internet

As we have become increasingly dependent on the internet, it has become the preferred domain of fraudsters to use. Fraudsters operate on several platforms, and their most significant task is to gain financial gain from their criminal activity.

 

Corporate fraud

Organized business fraud works a bit differently. This is about a person or group taking advantage of a company and the protection that comes with the Companies Act and limited liability.

In short, it takes place in such a way that you make a company appear better than the reality is and then apply for credit facilities with suppliers without intending to pay your bills.

It also happens that the company applies for a VAT refund at the same time as this creditor fraud and, in this way, also exploits SKAT and the state in its scam.

Suppose a private person will often end up in a criminal case and a possibility. In that case, you, as a director or owner of a company, can, of course, also be held criminally liable for fraud, then it is about companies proving this, and it can be difficult.

Because what if they are companies that can't pay their bills? If not, where do you draw the line?

 

To predict fraud

With the experience Creditro has built up in investigating and "capturing" organized criminals who set up or take over companies with the aim of "decorating" a company so that it looks as creditworthy as possible, we have built the only models in Scandinavia that measure up where degree a company follows a pattern we know from other cases.

Some of the characteristic warning lights are i.a.

  • The director has been registered in a debtor's register and is bought out of this (very suddenly). The director is also usually wholly new and has no industry experience (if any experience at all)

  • The company changes an accounting period so that they can submit a new account

  • The company is experiencing tremendous growth in results compared to the industry and the year before

  • Anonymous contact methods are used, such as, e.g., airtime cards and anonymous domain providers (fortunately, there are few of them - but Creditro is among the only ones that actively measure this)

  • Most often, the same addresses are used among companies, owners, and board members to juggle around; therefore, history is an essential factor in this.

We can see that even criminals are also creatures of habit. Therefore, they follow a combination of the same method as others or as they have done in the past. Thus, an active effort against organized crime will also require that you have or acquire the experience that, unfortunately, far too few have.

We join the race to create a world without fraud and money laundering.

Similar posts