Investment Scams

These are often known as ''boiler room scams'' and involve a cold-caller offering shares or property investments. Sometimes these shares and properties do exist, but are worth nothing like the amount suggested by your caller. Unfortunately, majority of people who fall for these scams are experienced investors.

Alarm bells should ring if you are called out of the blue, particularly by a company based abroad. You can see whether a firm is legitimate by checking it against the agency responsible for the registration of authorised firms in your country of residence. For example, here in the United Kingdom, the Financial Service Authority (FSA) holds the register of authorised firms. If a company is not registered it is not allowed to give any investment advice in the UK.

In conclusion, to avoid schemes of this kind, you must always verify the merits of an investment opportunity and also check the background of the person offering the investment.

 

If you require a more in-depth knowledge of this subject matter or any other fraud related topic, I invite you to contact me via email, contact@emgfraudconsulting.co.uk

Compliments of the season to you all.

Work at Home/Business Opportunity Scams

This scam is likely to become ever more popular due to  high unemployment rate. Typically these scheme offer a large income for not very much work, such as filling envelopes, assembling craft items or other easy-sounding jobs. They offer what sounds like a lot of money for this work and usually stress the advantage of working from home when it suits you.

If you sign up you may find that you need to spend money to make photocopies, take out newspaper ads or buy software. If you buy craft kits and make items you may find the promoter will not pay out because your work does not come up to their standards. You may even find it is actually a pyramid selling scheme and the only money available is for getting other people to sign up.

Legitimate work-at-home promoters should tell you the start-up costs as well as what you get for your money. Check whether you can verify information with other workers, and make sure you research the company.

If you require a more in-depth knowledge of this subject matter or any other fraud related topic, I invite you to contact me via email, contact@emgfraudconsulting.co.uk

In the coming weeks running to the festive period, I am going to talk specifically about top 5 financial scams and how to spot them. As the global economy is yet to recover fully from the recession, more and more people are becoming vulnerable to financial tricks and scams.  Millions of people fall victim to various scams due to reasons such as being attracted to financial gains, not being rational, unemployment etc.

Today’s article would look at: 

Advance Fee Fraud

An advance fee fraud is a scheme in which the fraudster persuades the target to advance sums of money by falsely promising the delivery of a product or service.

If you have ever received a badly spelt begging letter or email from someone you have never heard of, it is likely that you have been targeted.

The approach can be made by letter, fax, email or telephone, and usually concerns an amount of money that your correspondent needs to get out of their country. The victim is offered a large sum of money as a reward for helping with the transfer.

Typically, the writer claims to be a senior government official, an accountant with a state owned corporation, or perhaps a relative of a deposed or dead politician. It will probably be marked ''Strictly Confidential'' or ''Urgent'', and offer the opportunity to share in a multi-million pound bonanza.

The correspondent says that he or she wants to use your bank account. If you respond with details you will be sent more documents purporting to show that the money is genuine. You will then be asked to send your bank details and an ''advance fee'' to speed up the transaction. However, once you have sent the money an emergency will arise and they will ask you to send more.

 
For more information on this subject, please visit the Association of Certified Fraud Examiners

Avioding Credit Card Fraud while shopping online

It's been almost 6 months since my last blog update and for that I would like to apologize. With my experience of working in fraud prevention, I have come across several situations where people had their credit cards compromised. For this reason everyone must apply caution while shopping online.

These days, most people buy goods and pay for services online, after all, it is a very convenient alternative, especially if you are a round the clock person like myself and don’t have much time on hand to go out there and shop. Almost every shopper would know that among the legitimate online shopping websites are scammers who would take advantage of any opportunity that may arise. Therefore, one must remain vigilant and make sure that the website they’re buying anything from is legitimate. Now, doing that is easier said than done. The thing is that most of these fraudsters are very adept at what they do and even if you take precautions, there’s still a chance that you might fall victim. So, what precaution should you take?
 

Do a thorough research: Check the website and also the seller’s terms and conditions. Usually, if they are a legitimate company, there would be a very detailed list there. If there isn’t one and you feel like they are being vague about certain policies or if something seems too good to be true, then you might want to pause and think about going through with the purchase.

Trust your instincts if it’s telling you that something might be really off. Are you exchanging emails with the people behind the business? Usually, their email address can also be a telling sign of whether they’re legitimate or not. If they can afford to run a business then they would also be able to afford an “official” email address. If they are using a free one then you might want to reconsider dealing with them. This is especially so if they claim to have been around for a while.

Check pictures of the item itself. Are they taken from the manufacturer’s website? If the pictures seem like they’ve been taken off the website or a stock image then be wary.  For example, If you are buying a branded product such as an apple phone, then it would be wise to visit the company website first. Usually, they would have a list there of all the official sellers near or around you. If whoever you plan on buying the item from aren’t listed there then I would advise you ignore the deal and get it from a more reputable place preferably, one that’s listed.

The price itself. One of the most common reasons as to why people buy goods online is because of the lower price tag along with the fact that it is very convenient. However, if the buying price of an item is significantly lower than the market value, then you might want to think twice about making the purchase. It could be a scam. Are you willing to risk your money that way? capital NO I believe.

 

So there you have it, just some of the ways through which you can avoid getting scammed and losing your money. Of course, the above is not a complete list of cautionary measures to take but it is always good to have a general understanding in mind.

 
If you would like to discuss this case or any other fraud related topic, I invite you to contact me via email, contact@emgfraudconsulting.co.uk

 

 

 

Understanding the Fraud triangle

 

 

To give us an understanding of why people commit fraud, the fraud triangle provides a simple model and also helps us understand the fraudsters mind. Fraudsters come from all age groups, backgrounds, walks of life and ethnicities.

Identifying a typical fraudster is no straightforward task, although what we can do is to think about those forces that induce a person to commit fraud. A detailed explanation of those forces is reflected in a theory developed by Donald Cressey, a sociologist in the 1950s.According to him, three factors must be present for people to commit fraud. 

 

 

 

 

Pressure motivates the crime in the first place and is usually based on some "unsheareable" needs. For example, a fraudster might have financial problems, hence begin to consider committing an illegal act such as stealing cash or falsifying financial statements in order to fulfil his/her need.

 

Opportunity presents itself when an organization has weak internal controls or someone having power to override systems or has privileged access to resources. A potential fraudster will perceive an opportunity when he believes he can commit fraud with a small risk of being caught.

Most people who commit fraudulent acts are fully aware of what they are doing. This is where the third leg of the fraud triangle comes in: rationalization. Rationalization is the reason fraudsters come up with to justify their actions. “I did not take too much.”I had to steal to provide for my family."  “Everyone is doing it”.

If you would like to learn more about the fraud triangle, or other areas of fraud, I invite you to get in touch with me via email (contact@emgfraudconsulting.co.uk).

 

Fraud in Houses of Worship

Through my ongoing research, I came across an article that sparked my interest “ Fraud in Houses of Worship”. The article details a former church secretary defrauding a 200 member church congregation for 18 months by writing herself duplicate paychecks, stealing cash from donation deposits and taking credit card accounts in the church name, among other schemes.

In the current economic climate, am not surprised to see an uptick in this type of fraud, fraud examiners who are incharge of church finances and internal controls may be labelled as overreacting conspiracy theorist, when they tell church staffs they may have fraudsters in their midst, however fraud examiners know fully well that fraud can occur anywhere and at anytime.

Proper segregation of duties, effective internal control system in place and a proper employee background check would have identified a serious red flag for fraud but the church left it rather late.

 

If you would like to discuss this case, or any other fraud related topic, I invite you to contact me via email, contact@emgfraudconsulting.co.uk

Fraud Risk Assessment

Virtually every organization has some form of fraud exposure. And, many managers want a formalized methodology for conducting a fraud risk assessment. The Association of Certified Fraud Examiner (ACFE) have in place a straightforward and generic format for conducting and reporting on a fraud risk assessment. Please click this link to access.

Here's the structure, taken directly from the ACFE link above:

 

 

If your organization has never done a fraud risk assessment, now is a good time to consider doing one, don’t wait until after you experience fraud. If you would like to know more about this topic, I invite you to contact me via email (contact@emgfraudconsulting.co.uk).