Outing the Fraud Economy
How your customers have emerged as a creeping threat to your business
BY DANIEL BERLIND
Almost overnight , fraud has become a pervasive – and even celebrated – part of our daily lives .
Just look at Netflix ' s new game show , appropriately titled " Bullsh * t ," hosted by Howie Mandell .
On the program , contestants are rewarded not for knowing the right answer , but for being able to convince other players their answer is right , especially when it ’ s wrong . The New York Times described it as a " post-truth " game show that embodies our times by showing us what it ' s good to be good at : deceiving others .
In business , deception and fraud have risen to crisis levels . Fraud was already burgeoning pre-COVID-19 . But since the pandemic , it has mushroomed , costing businesses $ 5.4 trillion globally , more than twice the gross domestic product of the UK . Global consultancy Crowe has called fraud " the last great unreduced business cost ."
In the U . S ., reports of fraud , identity theft and other deceptions spiked by 67 % between 2019 and 2021 , according to the Federal Trade Commission . The grifts range from cyber and payment fraud to lying on bank loan applications , and more recently , supply chain and ESG reporting fraud , according to PwC .
The Rise Of The Fraud Economy
While many of these schemes are orchestrated by professional criminals , evidence suggests an increasing number of these perpetrators are casual practitioners of deception .
For example , Lexis Nexis found over 30,000 fraud rings engaged in forgery , filing false claims , identity theft , identity manipulation and fake checks . Many groups comprised family members or circles of friends who collaborated to improve their collective fraud success rates .
A cottage industry has sprung up online to help consumers buy fabricated documents , including bogus paystubs and bank statements , to fraudulently
34 | TRENDS MARCH 2023 www . aamdhq . org