Risk context

Many agencies publish fraud statistics. Three particularly respected sources are: CIFAS in the UK (see latest report); and The Better Business Bureau (see latest report) and the Association of Certified Fraud Examiners (see latest report) in the US.

Complete fraud statistics are almost impossible to obtain and unreliable because so much fraud goes unreported. That said, there are trends emerging from reported frauds that are worth sharing. The following is not a definitive list, but highlights some of the more common frauds affecting people and businesses today.


OLDER PEOPLE

Frauds that typically affect older people involve home ownership, tradesman/home improvement, sweepstakes/prizes, homeworking, postal, telephone, doorstep, email/online, relationship (e.g. romance, gaslighting), identity, investment, pension, health care and

charitable giving scams.

Of the frauds reported 32% of 65+ yrs people fell victim to telephone-based frauds and 54% to online frauds. For the age group 55-64 yrs, 23% fell victim to telephone-based

frauds and 70% to online frauds. 

Romance scams were on the increase in 2018 for those aged 55-64 yrs (and in fact proved to be the third riskiest scams for women). Financial losses caused by fake romances resulted in an average loss of £2,500 per fraud. This age group was also susceptible to

investment and employment scams.

For people over 65 yrs the biggest fraud threat came from investment scams followed by fraudulently promised holiday and/or leisure opportunities and also from people pretending to be able to provide

technical/online support.

The average financial loss per fraud was twice as high for this older age group (65+ yrs) over the average

financial loss of those aged 55-64 yrs. 

People aged 60+ yrs are now the most commonly targeted age group for account takeovers and identity fraud. 
Research indicates that as people get older they are less likely to report losses.
Across all age ranges, bank accounts are the most targeted products - not only to deplete balances, but also to provide access to legitimate accounts as routing conduits for proceeds of crime (money mules).

LASTING POWER OF ATTORNEYS / FAMILIES
Those looking out for the best interest of older people living independently, whether informally through family or friends or more formally via an Attorney with Lasting Power of Attorney, need to keep a weather-eye on those they support for indicators of emerging potential fraud susceptibility.

There may be signs that an older person is being scammed. While one of the following indicators on its own is possibly nothing to worry about, surfacing more than one, especially if they occur around the same time, could be a viable cause for concern. 

Indicators can include: 

  • unexpected changes to utility provider arrangements
  • an increase in the volume of charity and other unsolicited correspondence received
  • a rise in outstanding bills
  • inexplicable bank withdrawals to unusual beneficiaries
  • mention of new friends who suddenly appear on the scene from nowhere
  • someone unexpected asking probing questions about the older person or about their health or domestic affairs
  • mention of property going missing, or having apparently been mislaid
  • discovery of official paperwork that the older person is unaware of.

COMPANIES
Among the various kinds of fraud that organisations might be faced with, occupational fraud is likely to be the greatest and most prevalent threat . 

Fraud surveys indicate that where companies are concerned, 89% of cases involve some form of asset misappropriation, while corruption is involved in 38% of cases and financial statement fraud occurs in only 10% of cases.

But this is a little misleading, because where median loss values are considered, financial statement fraud is in fact the most costly fraud (seven times worse than the mean value of misappropriation losses). 

It is estimated that 5% of global business is generated from fraudulent activity.  

Small businesses lost almost twice as much per fraud than larger companies.

Internal control weaknesses and associated lack of oversight and control were responsible for nearly half of all commercial frauds. 

By far the most common initial detection method of fraud was from employee or customer tip offs (40% of the time), followed by internal audits (15% of the time) and management reviews (13% of the time).