Financial Fraud Explained

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Financial fraud can occur through different means, including identity theft and property fraud, and it’s a crime that’s increasing at an alarming rate. While stats show that it’s overtaken other crime rates over the last couple of years, many people don’t realise the extent of its seriousness. But what is financial fraud? In this guide, you’ll learn about the most common types, what counts as fraud, and how MJR Solicitors can help you if you’re accused of it. 

What is financial fraud?

Though a term used to cover a wide-ranging group of illicit crimes, serious financial fraud is what happens when an individual, acting alone or as part of a wider collective, misleads or deceives you in an attempt to take your money for their own gain. The Crown Prosecution Service (CPS) describe financial fraud as “the act of gaining a dishonest advantage, often financial, over another person” and concludes “it’s now the most commonly experienced crime in England and Wales”.

Any type of financial fraud can have a serious impact on a person’s personal and family life, as well as negatively affecting their mental health. This can be said whether you’re a victim of fraud or if you’re being accused or are facing allegations of fraud yourself. So the consequences of any financial fraud can reach far beyond the finances themselves.

What counts as fraud?

In the 21st century, there are plenty of ways that scammers, cybercriminals, and fraudsters can gain and use personal details to carry out different types of financial fraud. As online methods of fraud are becoming more and more authentic and realistic, many instances from seemingly trusted sources, online security often plays catch up. 

The end goal is to con people out of as much money as possible, by providing either bank or credit card details. Many of these crimes usually involve devious, underhand tactics, deception, and importantly, an abuse of trust. Combined, these ploys separate financial fraud from petty theft, burglary, or other criminal offences. 

But online fraud is just one area of concern and there are plenty of crimes that count as financial fraud. Whether it’s Fraud by False Representation, where someone can dishonestly intend to gain from someone else’s loss, Embezzlement where money is stolen by someone who’s been trusted to manage it, or Credit Card Fraud where a card is used to illegally buy goods or withdraw funds, the same tactics are used.

What are the different types of fraud?

The reality is that serious financial fraud is more common than you think. And, though it isn’t, it’s often seen as a so-called ‘victimless’ crime, though the effects can be damaging. We’ve compiled a short list of some of the most common types of financial fraud, with details on what they involve. But these are also examples of fraud that you can be either accused of or face allegations of yourself.

Identity fraud

Many types of financial fraud start with identity fraud (or identity theft) at the heart of it. This is when someone steals personal details from the victim, including name, address, bank details, passport number, email address, or any other information that is used to recognise identity. These are then used by fraudsters to buy goods or services or open bank accounts and get loans in someone else’s name. 

Investment fraud 

Investment fraud is something that can be used in multiple ways: emails, online, or even people cold calling in person at the front door. It’s most commonly attempted as a phone call with the caller explaining bogus investment opportunities, encouraging the handover of financial details for something that doesn’t exist.

While most, if not all, of these kinds of investment calls are fraudulent, the caller can be persuasive, offering big rewards with little or no risk. They can even give directions to professional websites and social media channels, all with convincing words and even ‘testimonials’ offering social proof. 

If you want to confirm if any investment credentials are legitimate, check using the Financial Conduct Authority’s (FCA) Financial Services Register or their ScamSmart checker to make sure. 

Mass marketing fraud

This is a common form of fraud, but perhaps not well known by its collective name. Mass marketing fraud (or consumer fraud) is when multiple emails, leaflets, phone calls, or mailings that make those ‘too good to be true’ claims and offer big money prizes or products in return for upfront cash payments or investment opportunities.

The fraudsters will often use aggressive or pushy marketing or selling techniques, like offering a time-limited offer, or selling the benefits of something that doesn’t exist. Mass marketing fraud can come in all guises including charity scams or lotteries.

Mortgage and lending fraud

Mortgage and lending fraud usually involves forging or fabricating personal and financial information. This can include credit, debt, and income details or falsely increasing the value of a property on a loan application, or getting applying for a mortgage beyond normal financial reach to defraud a lender.

Knowingly supplying false details, failing to supply correct documents, or knowing that financial information to be used by lenders is false are prime examples of mortgage or lending fraud. This could lead to excessive fines or prison. 

What are the penalties for fraud?

Committing financial fraud can come with huge penalties depending on the severity of the crime. These can include a range from community payback schemes as an alternative to prosecution, to fines and/or imprisonment. According to the CPS, guidance on maximum penalties for fraud can be “12 months’ imprisonment on summary conviction and up to 10 years imprisonment on conviction on indictment.”

How can MJR Solicitors help you?

If you’ve been accused of any of the financial fraud methods we’ve mentioned here, or are facing allegations of fraud, contact MJR Solicitors today for advice. Our team of fully qualified, specialist fraud solicitors can help you prepare for police investigation, secure bail if needed, or defend you in court. 
We’re available for you 24/7 to give you the dedicated help and support you need. Call us now on 01243 945 054 or email at info@mjrsolicitors.co.uk.

Mark Riley

Mark Riley is a specialist lawyer offering services in Criminal Law and Professional Misconduct Cases. Mark has studied around the world, including time in Australia. Whilst there he met many amazing and inspirational lawyers. Mark is a passionate advocate and can be found in Courts up and down the Country having practised in Magistrates' Courts, Crown Courts and various Tribunals.
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