Fraud Schemes to Watch Out for in 2024: A Guide for Businesses

COVID-19 accelerated the pace of digital transformation. With this comes new risks for fraud, making it more important than ever for accounting and financial professionals to be aware of the latest schemes

With the ever-evolving landscape of the business world, accounting and financial professionals must stay vigilant in their efforts to detect and prevent fraud. The COVID-19 pandemic has further accelerated this trend, with remote work, digital transformation, and economic uncertainty all presenting new risks for companies. In this blog post, we’ll explore five of the most common and pressing fraud schemes that organizations need to be aware of in 2024.

Cyber Fraud
Cyber fraud has been on the rise for several years, and it’s only becoming more prevalent with the increasing dependence on technology and remote work. From malware and ransomware to password cracking and phishing scams, cybercriminals have a range of tools and techniques at their disposal. This year, companies must be particularly vigilant in their cybersecurity efforts, as fraudsters are likely to take advantage of the ongoing pandemic to target businesses and individuals alike.

Vendor and Seller Fraud
Fraud by vendors and sellers is another common type of financial crime. From fictitious billing to duplicate invoice payments and check tampering schemes, it’s essential that organizations remain aware of these schemes and have processes in place to detect them. This year, it’s more important than ever to work closely with suppliers and ensure that they are adhering to best practices and established protocols.

Payment Fraud
Payment fraud continues to be a major concern, with false transactions, lost or stolen merchandise, and false requests for refunds all falling under this umbrella. Companies must be proactive in their efforts to detect and prevent payment fraud, using data analytics, fraud investigation techniques, and computer-aided auditing methods to uncover any irregularities.

Healthcare Fraud
Healthcare fraud is a significant issue, with schemes ranging from billing for services not rendered to misrepresenting the provider of service. In this year, it’s essential to have robust internal controls and a well-trained staff to identify and prevent healthcare fraud. Certified Professional Accountants (CPAs) can play a critical role in detecting and preventing healthcare fraud, leveraging their expertise in financial analysis and investigation to uncover any fraudulent activity.

Identity Theft
Identity theft is a growing concern, with two main types: traditional identity theft and synthetic identity theft. Traditional identity theft involves a criminal stealing an individual’s personal information, while synthetic identity theft involves a fraudster using a combination of real and fabricated information to create a new identity. This year, organizations must remain vigilant in their efforts to protect sensitive personal information and ensure that their cybersecurity measures are up to date.

Conclusion

Combating fraud requires a multi-disciplinary approach, leveraging the expertise of accounting, financial, and legal professionals, along with the use of advanced data analytics techniques. With these tools and techniques, organizations can better detect and prevent fraud, reducing their exposure to financial crime and other risks. To stay ahead of the curve, companies should invest in the training and development of their staff, ensuring that they have the skills and knowledge necessary to detect and prevent fraud in the business world of 2024.