FRAUD IN CONTEXT

Fraud (or 'Scam’) refers to deceiving someone for personal gain or to cause harm. It involves intentionally misrepresenting facts, lying, or manipulating situations to deceive others into giving up something valuable, such as money, property, or personal information. It is observed that people commit fraud for various reasons, and motivations can differ based on individual circumstances and contexts. The Fraud Triangle provides more insight into why people commit fraud. But before we proceed, what is a Fraud Triangle?

The “Fraud Triangle” is a social model developed by Donald Cressey, one of the first individuals to study how white-collar criminals differ from violent offenders. The model is used to explain the factors that contribute to fraudulent behavior.

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The Fraud Triangle above demonstrates that individuals are propelled towards committing fraud when three (3) pivotal elements converge:

·?????? Pressure: This represents the motivating factors that drive individuals to engage in fraudulent behavior. It could include financial pressures, such as debt or living beyond one's means, personal stressors, or external expectations.

·?????? Opportunity: It refers to the circumstances or situations that allow individuals to commit fraud without being detected. It could arise from weak internal controls, lack of oversight, or access to assets or information that can be exploited for personal gain.

·?????? Rationalization: Individuals justify or excuse their fraudulent actions. They may convince themselves that their actions are necessary, justified, or will not cause harm to others. Rationalizations can often involve minimizing the perceived impact of the fraud or blaming external factors.

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According to the 2022 Nigeria National Inherent Risk Assessment (NIRA) report on Money Laundering and Terrorist Financing in Nigeria, the prevalent categories of fraud in Nigeria are Mail Fraud (Business Email Compromise, email phishing), Identity Fraud (Driver License Fraud), Debit/Credit card Fraud, Recruitment Scams, Voters Fraud, Internet Fraud (inclusive of romance fraud, cyber-squatting, electronic signature fraud), and Advance Fee Fraud. On the other hand, there are wrong things that seem normal now but are fraud. These include yahoo-yahoo, voice and image cloning, ghost working, and "what you ordered versus what you get.” As an individual, you can take several proactive steps to help prevent fraud, one is to guard your personal and financial information, including your BVN, bank account details, and PIN. Use strong, unique passwords, multi-factor authentication, and antivirus software wherever you can apply them.

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If you have suspicions about a transaction, it is best to pause, calm yourself, and think clearly and critically before making a decision. Be cautious about unsolicited emails, phone calls, and text messages, and Trust your instincts! Review your bank statements periodically for any unauthorized transactions or suspicious activity. Additionally, adjust the privacy settings on your social media accounts and restrict the amount of personal information you share publicly. Suppose you suspect you have been targeted by fraud or have been a victim of a scam or fraud. In that case, you should report it to the appropriate authorities, such as your bank or law enforcement.

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Fraud is a serious offense with legal implications that can lead to civil and criminal consequences. Fraudulent activities are criminal offenses under various Nigerian laws, including the Criminal Code Act, the Penal Code Act, and the Advance Fee Fraud and Other Related Offences Act. Perpetrators can face criminal charges, which may result in imprisonment, fines (penalties), or both, depending on the severity of the offense. Victims of fraud can pursue civil remedies against the perpetrators. It may involve filing lawsuits to recover damages, restitution, or other remedies through the courts. Civil liability can result in financial penalties, compensation for losses incurred, or court-ordered injunctions. Regulatory bodies such as the Nigeria Economic and Financial Crimes Commission (EFCC) can investigate and sanction individuals or organizations involved in fraudulent activities within their jurisdictions. Sanctions may include fines, license revocation, or other administrative penalties. Law enforcement agencies and regulatory bodies can seize assets obtained through fraudulent activities and return them to the victims or the state. For instance, under Section 21 of the EFCC Act, 2004, all the properties of a person convicted of an offense under the Act and shown to be derived or acquired from such illegal act and already the subject of an interim order shall be forfeited to the Federal Government. Nigeria is a signatory to most international conventions and agreements to combat fraud and money laundering. As such, Nigerian authorities may cooperate with law enforcement agencies from other countries/regions to investigate and prosecute cross-border fraud schemes.

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Conclusively, fraud poses significant risks and consequences for individuals, ranging from financial losses and reputational damage to legal liabilities and emotional distress. Individuals may play a vital role in preventing and combating fraudulent activities by staying informed, protecting personal information, exercising caution, and reporting suspected fraud.

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Remember, EVERYONE has a role to play in fraud prevention, so protect yourself from fraud and be alert to potential fraud!