Consumer Fraud

1. The three aspects of fraud - Perceived pressure, Rationalization, and Opportunity were present in the CIT case as follows:

In today's day and age sales workers are taught to lie and cheat to get a good price. Also studies show, greed is closely related to envy, they’re the evil step sisters of life. That same study shows, almost everyone in today’s society show traces of greed. Greed has an impact of destruction of relationships, and most times leads to loneliness. Greed seems to be a common motive of fraud. Fraud is the “wrongful or criminal deception intended to result in financial or personal gain”. Also executives of big companies have a goal to rip you off, to make the maximum amount of money

An action is considered unethical when it goes against widely understood and established societal, professional and/or personal value systems. Fraud is wrongful behavior that is done with the intention to deceive others and typically involves a criminal act. Illegal acts are committed when established laws are broken. Walt Pavlo adversely progressed from displaying unethical, fraudulent behavior to outright illegal acts.

(TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.

I obtained the data for this report by scouring the internet for stories and data that backed up my claim that the fraud is committed mostly between individuals and conducted a survey at a large retail store that asked the following questions:

Internal fraud consists in “a type of fraud that is committed by an individual against an organization. [Furthermore], a perpetrator of fraud engages in activities that are designed to defraud, misappropriate property, or circumvent the regulations, law, or policies of a company”[8]. Not only has the incidence of internal fraud increased in frequency because of the availability of sensitive information such as client details or confidential business documents; moreover, this type of fraud is found in various types of organizations, ranging from corporations, public service institutions and financial institutions. Our analysis will concentrate on the most common and prolific types of internal fraud, namely identity theft, insider trading, loan fraud and wire fraud. Interestingly, PriceWaterhouseCooper conducted a survey that revealed that the “demographics of a typical fraudster are as follows: males (85% of cases), 31-50 years (72% of cases), reached high-school level (50%), Bachelor’s or post graduate degree (50%) and middle or senior management (52%)”[9].

Unfortunately, a quick scan of the business news will normally result in reports of unethical business behavior. To prove this point, let’s start with a review of the news for stories about fraud and other unethical behavior in business. You can use the University Library to start your search. Once you have located an article share it with the class by developing a summary of the important information. Make sure that you give credit to your source.

It is important to first gain an understanding of the various types of fraud, in order to aid understanding in regards to the prevention of fraudulent activity. This paper begins with a review of the definition of financial fraud, and identification of the different fraud types. Further, included is an examination of what motivates individuals to commit fraud, including an identification of some of the method in which people commit fraud. A discussion of the importance of the fraud triangle, and how rationalization contributes to fraud is a key area of focus. Finally, there is an examination of some controls that prevent and detect fraudulent behavior, including the value and importance of understanding the nature of fraud for

Another source of a great amount of fraud is the fact that a lot of businesses are careless when they're hiring new employees because they do not do conduct adequate background checks during the hiring process. They also have lack an adequate network and do not have a reliable computer security system in place so that also plays a big factor in to why their business is victim to fraud and cybercrime.

The common consumer fraud is cashier’s check fraud, fictitious/unauthorized banking, high yield investment fraud (Prime Bank Fraud), identity fraud, and phishing. Cashier’s check fraud is when scammers take advantage of the trust people place in cashier's checks to steal money from your account or to prevent paying you for goods and services (OCC, n.d). It is problematic disclose fake cashier's checks. Fictitious/Unauthorized Banking is banks functioning without an authorization or contract in the United States or any other country is functioning in an illegal manner. Dishonest individuals or companies guarantee their victims enormous profits with little liability if they invest in

According to Daniel F. Dooley (2008), a member of the Commercial Fraud Taskforce, financial fraud with private middle-market companies is on the rise. In fact, Mr. Dooley believes that he has seen more instances of fraud in the past two years than in the previous ten. He notes seven areas in which financial fraud has increased over the past few years:

Some industry-specific factors, such as having valuable near-cash assets, can increase the organization's vulnerability. Also they will need to rationalize the actions as justifiable. The individuals committing the fraud must first convince themselves that their behavior is acceptable or will be temporary. For example, Barry Minkow’s believed that the lies and deceit are for the betterment of his company and that with time everything will eventually return to normal.

Fraud is defined as a deliberate misrepresentation that causes a person or business to suffer damages, often in the form of monetary losses through deception or concealment. And Occupational Fraud as defined by the ACFE is the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets. Traditional fraud triangle theory by Donald Cressey explains that propensity of fraud occurring in an organization lies on three critical elements which are Pressure, Opportunity, and Rationalization.

The perfect fraud storm occurred between the years 2000 and 2002 involving two of the largest energy and telecom corporations in the United States: Enron and WorldCom. It was determined that both organizations fraudulently overstated assets, created assets from expenses or overstated revenues, costing investors billions of dollars and resulting in both organizations declaring bankruptcy (Albrecht, Albrecht, Albrecht & Zimbelman, 2012). Nine factors contributed to fraud triangle creating this perfect fraud storm, and assisting management in concealing the fraud until exposed and rectified.

A business can not work out without an account system, which includes internal. Internal controls are used by companies to make sure financial information is accurate and valid. Strong internal controls are signs of a financially healthy company and protect the company’s integrity. Strong internal controls can also increase a company’s profitability. There are several types of internal controls that companies used to protect themselves such as: Segregation of duties, asset purchases, supervisor review, internal audits and adequate documents and records. This paper will discuss several topics from a case study about And the Fraud