Opportunities for committing fraud

Opportunity for fraud is the chance for criminals to commit fraud without being caught.

It can be viewed as:

…the fuel that keeps the fire going (Lister 2007)

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Criminals would be looking for every possible opportunity to commit fraud without being caught. We must work hard to limit the opportunity by being effective investigators and changing our approach. We will learn more about this in Week 2.

Examples of opportunities for fraud

Here are some examples of opportunity for fraud:

  • People being overly trusting in sharing their details with others
  • The use of technology (eg, online banking, mobile banking, the use of the internet for shopping and social media purposes) has opened the door for fraudsters who are technically capable​
  • Lack of security (eg, no computer anti-virus software installed, no backups, using easy passwords)​
  • The victim’s lack of awareness about certain types of fraud or how fraud is committed makes them vulnerable to manipulation ​
  • Lack of monitoring ​
  • Businesses not investing in anti-fraud controls​
  • Confidence that fraudsters can get away with the fraud
  • Criminals shift activity into areas they perceive to be of lower risk, both in terms of the likelihood and the consequences of being caught​
  • Reluctance on the part of the victim to report fraud to the police

​References

Lister, L.,M. (2007) ‘A Practical Approach to Fraud Risk: Comprehensive Risk Assessments Can Enable Auditors to Focus Antifraud Efforts on Areas Where Their Organization is Most Vulnerable’ Internal Auditor 64(6) 61-66

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This article is from the free online course:

Fraud Investigation: Making a Difference

Coventry University