FRAUD occurs when someone engages in criminal deception. He/she deliberately deceives another person to secure a monetary gain or othrt benefits. The most common form of fraud is theft by false pretence.
SCAM Is an attempt to defraud a person after first gaining their confidence by exploiting human characteristics such as trusting others, being compassionate, naive or greedy.
TYPES OF FRAUD AND SCAMS
ADVANCE FEE FRAUD
PONZI SCHEME: Ponzi schemes promise high financial returns or dividends not available through traditional investments (more than 15% per year).
WONDER BANKS: Wonderbanks are ponzi schemes that pose as financial institutions and try to steal your money by promising exceptionally high returns.
PYRAMID SCHEME: In a pyramid scheme, you asked to join an organization and make a payment for a high profit in return. The person gets a commission in return for recruiting new members or for selling a product.
ADVANCE FEE FRAUD: Advance fee fraud is when you pay money to someone in expectation of receiving something of greater value and then receive little or nothing in return.
IDENTITY FRAUD: Identity fraud is when someone steals your private information (bank account, ID Card, or else) to assume your identity to engage in fraud.
The rate of fraud and scams has reason drastically all over the world and as business onwers we must be smart in the way we handle our businesses. I hope this information enlightens you on the loop holes.
Source: FINANCIAL INCLUSION MODULE
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