The Merriam-Webster dictionary defines “fraud” as:
- the crime of using dishonest methods to take something valuable from another person
- a person who pretends to be what he or she is not in order to trick people
- a copy of something that is meant to look like the real thing in order to trick people
In other words, fraud is a lie used for personal gain. Because it specifically refers to one person’s dishonest gain at the expense of another, it is an illegal act that is punishable by law. Fraud is typically a felony offense, and those convicted of fraud may face prison time, fines, probation, or all of the above. In honor of Fraud Awareness Week 2016, our criminal defense attorneys in Tuscumbia MO are here to examine fraud and the impact it has on our current society.
How Fraud Affects Businesses
Businesses and corporations are common victims of fraud. Fraud can and does happen on a vast scale, but businesses do not have to be the victim of major schemes in order to suffer serious hardship. Small fraudulent acts are surprisingly common, unfortunately, and their cumulative impact can have far-reaching effects. In fact, according to Smart Business, a typical organization loses approximately 5% of its annual revenue to fraudulent acts.
How Fraud Affects Individuals
In addition to businesses, individual people can also be targeted. Even when a company or corporation is the intended target, the consequences can spill over and affect individuals as well. Consider the following examples:
- Insurance Fraud – When insurance companies suffer financial loss due to fraud, they generally compensate by raising costs for every one of their customers.
- Mortgage Fraud – Mortgage companies who have been victimized by fraud may not be willing/able to provide large loan amounts. If mortgage companies will only authorize smaller loans, property values may decrease.
- Identity Fraud – If someone steals your credit card information to make unauthorized purchases, the credit card company will typically reimburse you and take the loss upon themselves. They make up for this loss by increasing their interest rates and enforcing stricter regulations.
- Online Fraud – There are various types of online fraud that can have far-reaching socioeconomic effects for individuals all across the States, including:
- loss of retirement
- higher rates on needed services
- associated emotional/psychological burdens
These are common examples of fraud in action, but this is certainly not a comprehensive list. Countless other forms of fraud (welfare, medical, auto, etc) take place every day. While the subtleties of each type of fraud are different, they all have one thing in common – they are all a huge drain on society.
Fraud On A Local Level
The word “fraud” has a scary and intimidating connotation. It sounds like something that happens in big cities and in the movies – something that shouldn’t be present in the relatively small towns around Lebanon and the Lake of the Ozarks. However, our area is no more immune to fraud than anywhere else. If you are the victim of fraud, contact our attorneys at the Lake of the Ozarks for assistance.