Today, we’re describing the different types of fraud that can occur in businesses and what you need to do to put a stop to them.

What Is Fraud?

Fraud is a form of criminal deception with the aim of financial, or personal, gain. Essentially, fraud is when an individual directly deceives a person in order to benefit themselves. If fraud is found to have been committed, the individual can face vast fines or imprisonment, depending on the severity of the crime.

What Is Business Fraud?

In simple terms, business fraud refers to crimes committed by employees whether they be Board level, senior, middle management or those on the ‘shop floor’.; these often involve company funds being stolen and disguised under the guise of business activity. Like other types of fraud, business fraud is a punishable offence and requires appropriate investigation.

Different Types Of Fraud In Business:

Payroll Fraud

Payroll Fraud is the theft of money through the company’s payroll system. This often consists of an employee, or employer, boosting the amount they should be paid on the payroll system. Or through ‘Ghost Employee Fraud’ of which a fake employee is created in order to send money to.

Financial Statement Fraud

This is when a financial statement is deliberately over, or understated, in order to conceal the true financial health of the company. This is another type of payroll fraud and can potentially lead to wrong business decisions, leading investors to lose out on their money.

Asset Misappropriation

Asset misappropriation is when the individuals that are entrusted with managing a company’s assets take advantage of this position and steal money. It is often also referred to as ‘Insider Fraud’ or as a type of employee fraud.

Tax Fraud

Tax fraud can be defined as when any individual knowingly falsifies information on a tax return in order to limit the amount of tax they are required to pay to the government. Tax evasion is one of the most common types of fraud; in businesses, this is done by falsifying statements to to limit the amount of income tax.

Data, Intellectual Property and Identity Theft

This refers to the stealing of ideas, content or personal information from a person or company. When a data leak occurs in a company, individuals can be put at risk of identity theft through their compromised information.

Bribery and Corruption

Bribery and corruption are when a person in power commits a crime by offering a financial reward, with the intent of fraudulent activity being committed in return.


This is a type of financial statement fraud, of which money is taken off the top of the bank statements of a business each day and a lower daily total is reported, creating fraudulent invoices.

Insurance and Banking Fraud

Insurance fraud is when a company, or employee, stage a theft or exaggerates a claim to gain compensation from a bank or insurance company; this is then directed to the company payroll account, or the employer’s personal account.

Do You Have A Problem With Fraud In Your Business?

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Effects Of Business Fraud:

Loss of Reputation and Brand Image

Business fraud can affect the integrity of your companies’ security system. By doing so, it puts your company reputation at risk, as customers are less likely to trust your brand. Over time, this can cause a reduction in new customers, as well as previous ones, as they may choose to use an alternative company.

Reduced Company Morale

If the fraud was committed by an individual high up in the company, it is likely that employees will be less trusting of the business owner. This in turn, reduces company morale and can subsequently affect day-t0-day productivity. Additionally, employees may feel guilty that they did not detect any financial crime, affecting the company culture as a whole.

Potential Loss of Employees

If employees cannot trust their employers, then they are likely to find a company that they can trust. If business fraud is detected, and found to have a large impact on the company, it is likely that employees may begin to look for jobs elsewhere.

Fraud Prevention:

How To Protect Your Company From Fraud:

In order to keep your business protected from fraud, there are a few steps you can take. These include protecting your bank accounts, safeguarding computer systems, running employee background checks and purchasing insurance. Whilst these are not a complete safeguard against fraud, they help considerably to prevent it.

How To Detect Fraud:

There are many ways that you can detect fraud within a business, however, the most effective one would be by hiring a private investigator. Expert Investigations offer a comprehensive approach to detecting employee misconduct, offering a variety of services. Various surveillance methods, computer examinations and asset reports are just a few of the services offered. Hiring a private investigator means that as an employer, you are able to focus on your business, letting professionals with over 20 years of experience gather the evidence you need to tackle the issue head on.

Call us today to discuss out our team can help you! Or alternatively, book a consultation at a time that’s convenient for you: