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Risk Ident contribution: Getting into the mind of a fraudster, The Times

Risk Ident contribution: Getting into the mind of a fraudster, The Times

The Times of London recently published an article on why people commit fraud, including insight provided by our CEO, Roberto Valerio. From teaching others what we know, Roberto and Risk Ident hope to combat the heavy losses sustained by businesses at the hands of fraudsters.

Charles Orton-Jones wrote in his piece that not all fraudsters have malicious intentions. Not everyone realises the damage that false claims can have on businesses. In the last year alone, businesses lost £125 billion. So who are these fraudsters and where do they come from?

Within ecommerce and telecom fraud, we can separate fraudsters into three categories: the lured, the desperate and the criminal – just like an old Spaghetti Western!

  • The money-scarce: A lot of the time, fraudsters are simply those suffering from a lack of income and/or a glut of greed. They want premium products but just haven’t got the funds. Often this type isn’t sure a crime has been committed, they merely ‘bend’ the law in return for a ‘victim-free’ pay day.

As Orton-Jones explains, ‘old wheezes are constantly tweaked and repackaged’, and ‘a memory of feeling a bit green after too many sangrias mutates into a claim of full-on gastroenteritis’. Little white lies. That’s all it takes for a regular shopper to become fraudulent. Intentional or not, it is still criminal and causes untold damage.

  • Petty criminals: Typically, petty criminals are looking for fast solutions for past failures. These fraudsters use stolen credentials and payment information to obtain goods and resell them on for a quick win.
  • Organised crime: For dedicated criminals, fraud is a way of life. They are responsible for high losses, potentially causing thousands in damage in a single case. The criminal gangs tend to be structured and working across borders, with some using their proceeds to finance other high-margin crimes, e.g. selling drugs or even weapons.

It’s clear that fraudsters’ intentions vary greatly. The first two cases are mainly out of greed and opportunism, whereas the latter is based on very real, dangerous criminal motives. Whatever the reason, most fraudsters will justify their actions by telling themselves that they’re ‘owed’ a payday, that the crime is victimless, or even by depersonalising the victims.

Rightly so, Orton-Jones finalises his article by questioning: “Are we all potential fraudsters?”. With more fraud being committed online, the risk of being caught is potentially lessened, meaning that it can be highly lucrative, and not as dangerous as old-fashioned offline crimes like robbery or burglary. These days, stolen money can be moved freely, easily and – most importantly – anonymously out of the system and into fraudsters’ pockets.

With the risk-reward ratio working in a criminal’s favour, a life of crime, or just a one off payday, is ever more enticing. Let’s face it, you must be a fool if you run into a bank with a gun nowadays.

 Download the original article published in The Times, issue 22/08/2017 (PDF)