A Detailed Look At Fraud
Fraud – trying to hide or transfer an asset prior to going bankrupt, not being truthful or fully disclosing all details, intentional deception made for personal gain.
Fraud is an interesting word and concept; it also conjures up visions of shady criminal types lurking about. And while some fraudsters are from the criminal world, many are not. Many people who commit fraud are everyday people like us. They go to work each day, have families, take holidays, etc.
Is fraud a crime that can send you to prison?
Yes, it is a crime and a serious one at that, which may bring jail time with it.
In reviewing fraud and its definition, an emphasis has to be given to the part that states, for personal gain. Most times if someone does commit a fraudulent act or fraud, the motives are usually for personal gain, mostly financial gain. You wouldn’t commit a crime, or commit fraud, unless you were to get something out of it.
So in looking at some of the various types of fraud that can be committed, we also will look at the motivation behind committing the act, and also some of the consequences.
Scams and scamsters are lurking around every corner. You try to find new ways to make and earn money, the scamsters try to find new ways to take that money from you.
It is a circle of scamming.
This is a common type of fraud. Frauding you to get your details and money.
There are a lot of new and quite elaborate scams out there as well.
It’s not just the skimming at the cash points you need to be aware of, but also not giving out your details to anyone. ANYONE!
Someone trying to gain your details and information via the phone is “vishing”.
A survey by the FFA UK or Financial Fraud Action UK, found that out of 2,002 UK adults, 23% had previously received a cold call requesting personal or financial information. Of those surveyed, 39% could not discern between genuine call and a fraudulent call.
It’s called “vishing” or phoning people up and sounding like a bank or other professional institution and asking for bank or financial details for a variety of reasons. The scammers may say they are the police, a bank, a fraud investigator, etc, but they sound very convincing.
The study also showed that those over the age of 50 were more vulnerable to these types of scams and fraudulent activity.
Here are some scams that are out there:
Fake Police: This scam is ingenious and very original and clever.
Someone rings you claiming to be the police and that your bank account has been compromised or hacked into. The fake police need your details to freeze the account. They ask you to type your PIN into the phone, at which point they capture your PIN.
Should you become suspicious or question them, the fake police advise you to hang up and call 999 to to confirm this is all real. If you do phone 999, you get the same fake police person, now pretending to be a 999 operator as they never hung up or broke the connection. They then inform you that yes, the person you had spoke with was indeed real.
In some instances the scammer tells you to phone your bank. Again, they do not break the connection and pretend to be your bank. The scammers would then send around couriers to pick-up the bank cards as you think you have been speaking to your bank.
But why would the police be involved in a bank issue, unless the bank had been robbed. Your bank or the police will NEVER as for your details. Nor would you phone 999 for a bank issue.
Fake Windows or Computer Tech: Someone phones you saying they are a “Windows” or some form of support technician and they want to help confirm your computer is virus free as there are many new viruses out there.
Who provides this kind of service, think about it.
The technician takes you through a few checks on your computer and in reviewing certain files on your computer states you are infected and they can clean the machine, but you need to provide them remote access, which you do, and then they have control over your computer to snoop around. Some scams asked a person for their card details, to seemingly pay for the viruses to be removed.
This is an elaborate scam as the person is asking for remote access to your computer and your bank details. Then if they have control of your computer, they may steal important files or ID stuff, or plant a virus.
There are other variations on this scam as well.
Calls From Your Bank: Your banks phones you and states your account has been suspended due to recent activity and they need you to confirm your details and PIN.
Banks have stated time and time again, they will NEVER ask you for your PIN. They already have the details they need, and if they phone you, there are questions they may verify, my account has a verbal password, but never your PIN.
You can always hang-up if you get a call like this and ring your bank back on a number you know is correct and inquire about the account and recent phone call.
Tax Scams And Rebates: You receive a fraudulent email that appears to be from HMRC asking for payment or to set-up a repayment plan and they ask for your bank details, or they need your details to send money to you as you are due a rebate.
Have you ever given HMRC your email address?? They usually contact people via the post.
Never follow the links provided, and you can always phone HMRC directly to inquire about any taxes owed or due you.
Pornography Scam: This one is new and recent.
You receive an email, say from PayPal, that your ‘account has been implicated in an illegal pornography transaction’ and is frozen or blocked.
The email requires you to provide your details so the block or suspension of the account can be lifted and you can avoid a police investigation.
There are many reasons why someone may feel compelled to provide their details. Perhaps they do visit porn sites, or download music or other files and are concerned they may have got caught up in something and wish to avoid the police. Maybe the person is concerned their computer was hacked and involved in something illegal.
However, don’t fall for this scam.
Why would anyone need your financial details and wouldn’t the police contact you directly if there was an issue?
Part of what to remember here is how would some of these companies even have your email address??
The links they provide do not even begin with the company’s name or go to their web site.
Investigate the email or phone call you receive, don’t just take it for granted that it is accurate or correct.
This is fraud on a very basic and somewhat innocent level.
In the instance of someone who may be self-employed, they increase their income based on what they feel they may earn.
Either way, it is fraud.
But who is to blame here?
You overstate your income, the bank or credit card company does not fully underwrite or verify the income and grant the loan or credit card.
In many instances, and we will find out more on this with insurance fraud, loans and credit cards can be underwritten or investigated, after the fact. After the time of the application, even though they have been approved.
What can happen if this were to occur?
In most instances if it is on a small scale, not much. The lender did not follow “due diligence” so they take some responsibility here.
People ask if they will go to jail for doing such a thing?
There is a possibility, but the probability is low. It would be up to the bank or lender to pursue any criminal activity.
Is transferring a property before going bankrupt seen as fraud?
What is Bankruptcy fraud?
Is not disclosing an asset fraud in Bankruptcy?
The Bankruptcy forms themselves ask about any transfers or sales of property for the prior few years before you went bankrupt, so this does need to be disclosed. If you have sold or transferred property and do not disclose it, then it is as simple as lying. It is fraud.
Also, just because the Bankruptcy forms ask about just a few years back, the Official Receiver in a Bankruptcy can look back even further if the need be.
And what if you have transferred a property, sold a car, etc, what can the Receiver do, what’s the worst that can happen??
The Receiver could issue a BRO or Bankruptcy Restriction Order against you, keeping you under the restrictions of Bankruptcy longer than the usual 12 months and for up to 15 years!
They also have the authority to reverse the sale or transaction, meaning they can contact who you sold or transferred the property to and attempt to get it back or the cash equivalent of the value of the property.
This is where it can get ugly, bringing others, friends or family into your Bankruptcy.
There are instances of people not just giving a property to a family member to hide it, but in some instances selling a property and using the proceeds to pay back a debt to a friend or family member; which is in essence preferring that person over their other creditors.
When this is found out, and you would be surprised how these things are uncovered, the Receiver asked the family member who had been paid for that money back.
If the friend or family member state they can not pay the money back, the Receiver then chased them for the money. Ultimately the Official Receiver can make the friend or family member bankrupt to get the money back. And if the friend or family member may own their own home, it could have been lost if they were made bankrupt.
So it gets not only ugly but complicated as well.
Some people in their querying this ask about being charged criminally due to misrepresenting something or committing fraud in their Bankruptcy: In most instances no, they are not charged criminally due to doing this, but that does not mean it has not happened. Depending on the severity of the matter, charges could be brought up.
So I suppose the word here from all this is to not transfer or sell assets prior to going bankrupt, and if you do make the decision to do this, be aware of the ramifications of such a move.
Is not disclosing an asset or not answering all the questions asked in Bankruptcy fraud, yep, it is.
And again, why even begin to think about or do this.
If you have assets that you need to protect you may want to look at other options besides going bankrupt, possibly a Debt Management Plan or an IVA/Individual Voluntary Arrangement. While they may take you a little bit longer to be debt free, at least you are not committing fraud and all the implications of doing so.
And one question someone may ask is, how will they find out??? First, who is they?? The courts, the Receiver, etc, are “they”.
In being less than truthful in your Bankruptcy there are a variety of ways this may be discovered. It may be through the requesting of documents to prove an expense or something you have written down on your Bankruptcy forms; if you cannot show this, it can cause the Official Receiver to look even deeper into your bankruptcy and situation.
There are also land records, records through the DVLA, etc; paper trails can be found.
So I would venture the best advice would be to be as truthful and honest as you can in completing the Bankruptcy forms and discussions with the OR.
Insurance fraud, this is the big one, the granddaddy of fraud, and there are so many aspects to it, and how to commit insurance fraud. Insurance fraud can be from something small and trivial, like not disclosing something, to a huge and well planned out act.
If something has a value, it can be insured, and if it can be insured, insurance fraud can be committed.
Insurance fraud is a billion Pound a year industry.
Insurance fraud cost us all a £1 billion a year!
Each week 2,670 fraudulent insurance claims worth £19 million are being discovered by insurers as they try to uncover more and more insurance cheats.
Insurance fraud can be everything from submitting a bogus or exaggerated claim, to not disclosing full details or facts; such as in auto insurance using a different address.
Insurance companies have found 139,000 false claims in 2011, which was up 5% from 2010. Fraudulent claims costs each of us an extra £50 a year for every UK policy holder.
The most common insurance frauds were home insurance claims with 71,000 fraud claims found, at a value of £106 million.
Fraudulent auto insurance claims are the most expensive, with 45,000 fraudulent claims being found. Fraudulent whiplash was the main type of claim that was discovered. These claims have been on the rise and in part have been why our auto insurance premiums have been going up steadily.
Due to all this fraud, the insurance industry has started an Insurance Fraud Register. The register will be administered by the Insurance Fraud Bureau. This IFR, will be a complete list of known insurance fraudsters, and will be used to help insurers be informed of who has committed fraud and also in making informed underwriting and claim’s decisions.
In other words, if you are on this register, you may find it very difficult to get any insurance in the future. And we live in an insurance world, especially auto insurance if you want to drive.
The insurance industry in the UK is huge, the third largest in the world and the largest in Europe. To save even a percentage of the £1 billion lost each year is a huge savings, and one that could be passed onto us consumers.
Car Insurance: Probably the largest group where insurance fraud is committed.
One very popular form of “insurance fraud” is using a different address for our residence when taking out an auto insurance policy.
There are certain areas in cities where car insurance is higher than other areas; certain post codes have higher premiums based on claims, and other factors. So someone gives a different address, perhaps a friend’s or family member’s address for the auto insurance as it will reduce their premium.
Should they ever have a claim, and this is found out by the insurance company, the claim could very well be denied causing the person to be liable for repairs, and possibly open to legal action.
Causing an accident on purpose or flashing one’s lights to signal to another driver it is OK to pull out or turn, and then having an accident, are common types of accident scams or fraud.
You take out a travel insurance policy and forget to mention you have a particular health condition. Should you take ill or have an episode related to the illness, the insurance company could deny the claim. This leaves you owing any medical bills associated with the illness while you were abroad.
These medical bills can add up, and make your holiday much more expensive.
Life Insurance: Fraudulent claims on life insurance policies are rare, but they do occur. Someone faking their own death has occurred, however it is the exception.
Fraud associated with life insurance policies is again more of an act of omission. The insured fails to mention they are a smoker, or that they engage in some form of risky behaviour or sport, or that they have a pre-existing health condition.
As you can see, there are a lot of scams and fraudulent activities going on, and more are being thought up every day. And it is not just the criminals that are creating this billion pound industry of fraud. It’s also the everyday man and woman who may feel the need to use a different address for their car insurance, or fail to disclose a health issue. In the eyes of the insurers, it is still fraud.