In the heart of Manhattan’s Financial District


In the heart of Manhattan’s Financial District

Common types of business fraud

On Behalf of | May 6, 2019 | Fraud |

Business fraud is a criminal offense of intentionally attempting or successfully executing a plan to defraud a business or obtain control of property owned by a business. These goals are usually accomplished via false representations, promises or pretenses. Business fraud is common, especially among small businesses with 100 or fewer employees. Small businesses experience an average loss of $154,000 because of fraudulent activities.

Many parties can commit business fraud, including employees, executives, partners, customers, clients and competitors. Here are some of the most common types of fraud that take place in businesses. 

Payroll fraud

There are several different ways payroll schemes can occur in a business. For example, an absent employee may ask a co-worker to clock in on his or her behalf. Another instance is an employee requesting a pay advance without paying it back. 

Identity theft

When fraudsters steal a business’s identity, they can use it to access credit. Identity theft usually occurs by unlawfully accessing bank statements, financial statements, tax documents or computers. Both physical documents and digital files are at risk.

Return fraud

Businesses that sell products often experience return fraud. This may take place when a customer steals an item and attempts to return it to make a profit. Another example is a customer buying a product, using it and returning it even if the product is perfectly fine. 

Money fraud

Counterfeit money is in circulation across the country. It can take the form of a $1 or $100 bill. Customers, clients, vendors or partners may pay a business in fake cash. Businesses do not receive any revenue when accepting illegal cash.

Workers’ compensation fraud

By law, many employers have workers’ compensation coverage. Unfortunately, some employees may abuse this system by making up an injury or illness. Another way to defraud workers’ compensation benefits is a worker who gets hurt outside of work and claiming it occurred on the job.


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