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4 types of fraud to be aware of in 2022

Increased internal fraud. The effects of COVID-19 on the world of business are still being felt across many companies. The change to work from home has been a difficult and contentious decision for many CEOs across the world, couple with the “great resignation” where workers are moving to either seek more freedoms or change their job type post-pandemic. 

These working practice changes have led to higher turnover and a change in the way business operate, which in turn could lead to lax security. This coupled with the more internal fraud (employees committing fraud either by false expenses, time theft or even for financial/accountancy employees) is putting business under more pressure. It is not easy when the labour marketplace is buoyant but unless companies start to take this type of fraud more seriously with audits, then losses will only increase.

Continued abuse of online retail and armchair fraud. Home delivery and online ordering has been increasing over the last years, even prior to the lockdown – and the fraud surrounding it has also grown. Cases of wardrobing [1], friendly fraud [2]and “professional refunders” [3] are being reported more and more often, but with more and more businesses moving online, or starting up online, without having the right policies in place. Retailers need to ensure they have the right checks in place for serial returners, or ensure they get the product back in case of refunds or otherwise more and more people will start to exploit what they see as “Robin Hood” fraud [4].

Beware of Romance Scams. Romance scams are already rife in the industry, with loneliness increasing due to lockdowns and the change in the workplace. They are also increasing in complexity, with long running phishing overtaking short-term for the first-time last year – with elaborate schemes involving fake kidnappings, deepfakes and even black-market documentation. As difficult as it is to prevent APP fraud, we need to start arming people with the knowledge to question any payment requests they receive.

Alternate Fuels Fraud. With the move towards electric and hybrid vehicles the nature of refuelling has changed the fuel card landscape. Whilst a lot of options include free re-charging, it has been widely agreed that this will not remain the case for much longer. When electric/hybrid vehicles take over the traditional fuel vehicles, then payment for electric vehicles will start to be more apparent – and this will come with its own set of problems.

With universal plugs, theft of fuel cards for EV will still be prevalent as fraudsters seek to charge vehicles without paying. Not just this, but the possibility to use fuel cards for convenience items or mechanical goods becomes even more important when refuelling takes hours instead of minutes. As always when there are great changes afoot, there are vulnerabilities and fraudsters will look to take a chance for a profit!

 

[1] Wardrobing is the act of purchasing an item of clothing with the intent of wearing it once before returning it and claiming a full refund. This type of fraud has increased significantly with the rise of social media and influencers.

[2] This type of chargeback fraud occurs when a consumer requests a chargeback via their bank or issuer instead of directly with the merchant

[3] Professional refunders are increasingly common on the regular, surface, and dark web, providing fraudulent services where they will take a percentage of the refund and in exchange will do all the work on the consumer’s behalf. They know the tricks and policies in place and can secure several thousand-dollar refunds in one single opportunity. For more information, please listen to the Time To Talk Fraud podcast, episode 2

[4] Robin Hood fraud is a psychological phenom where ordinary consumers justify their fraud practices by targeting seemingly large corporations

 

 

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