Financial Future: Avoiding Financial Fraud

Avoiding Financial Fraud

Tushar Khatri

What is a Financial Fraud ?

Financial fraud can be broadly defined as an intentional act of deception involving financial transactions for the purpose of personal gain.

For Example

If the investment broker is fully aware that no such repositories exist and still receives payments for worthless bonds, then victims may sue him for fraud.

Types of Fraud

IIlegal Deposit Taking. Part of the money deposited by early investors is used to pay the profits due to investors. The operator continues paying these profits for a few months to lull investors into a false sense of security and to persuade investors to invest more.

Cheque fraud. Dodgy cheques bounce because there are insufficient funds to honour them, or are simply fakes. In either case, the away to avoid this type of fraud is to insist on bank cheques or avoid cheques altogether.

Banking/Identity fraud. This involves someone acquiring your banking details and then using them to steal from your accounts.

Direct theft. Employees may ‘lift’ stock or pocket payments by failing to process the sale or deleting invoices.

Invoices and payments fraud. These types of fraud rely on your business having less-than-perfect accounting practices that see automatic payments made for incoming invoices for something you haven’t ordered or received. Or payments are made to non-existent employees, or excess amounts paid to actual employees

Embezzlement. Is the illegal use of funds by a person who controls those funds. For example, a bookkeeper may use company money for his own personal needs. Many times, embezzlement stories don’t make it into the paper because businesspeople are so embarrassed that they choose to keep the affair quiet instead.

How to Avoid Financial Fraud :

Don’t believe your caller ID. Technology makes it easy for scammers to fake caller ID information, so the name and number you see aren’t always real. If someone calls asking for money or personal information, hang up. If you think the caller might be telling the truth, call back to a number you know is genuine.

Don’t deposit a check and wire money back. By law, banks must make funds from deposited checks available within days, but uncovering a fake check can take weeks. If a check you deposit turns out to be a fake, you’re responsible for repaying the bank.

Do online searches. Type a company or product name into your favorite search engine with words like “review,” “complaint” or “scam.” Or search for a phrase that describes your situation, like “IRS call.” You can even search for phone numbers to see if other people have reported them as scams.

Watch Your Investments and Verify Them. If you have a stockbroker or an investment advisor, you should verify your investment holdings independently, and do not rely just on the statements you receive from your advisor.
Protect your PC. Many forms of financial fraud come through stealing of personal information on PCs. Keep that computer protected with the latest anti-virus software.
Be Careful When Wiring Money. Wiring money is sending people cash, so use caution. Many con artists insist upon bank wires for transactions. It is almost impossible to reverse money wires once they have been completed, and hard to trace. Be sure that you are dealing with a legitimate organization if you are wiring money.

How I can avoid Financial :

When I go into the bank and I get a Credit card, I have to make sure that no one knows my pin or otherwise they can steal my card and abuse it, if it has not been reported stolen. Also, if I do online banking, where I pay phone bill online, I should have a security system on my laptop like Norton or McAFee to help avoid people hacking into the laptop to steal valuable information. Now when you get a new phone it asks you if you want to set up with yellow pages, this is because if you don't have them in you contacts it will put a name on the number and tell you exactly who it is, if not it says "spam or scam" to make sure your safety.

Conclusion :

In Summation financial fraud, is heartbreaking and could eventually wreck you financially, and because of this you need to take precautions that protects your identity and our money you have save up for. And downloading security, and yellow pages to help you know if is a scam or a person.