‘Tis the Season – for Fraud?


Scott Patterson
ACFE Senior Public Relations Specialist

We receive questions from the media about all sorts of fraud-related things. Business writers and reporters often ask about trends and the latest statistics on fraud – sometimes on specific issues like mortgage fraud, identity theft, healthcare fraud and others. Sometimes the need is for more general statistics, like those in the Report to the Nations on Occupational Fraud and Abuse.

It stands to reason, then, that during a certain time of year – such as the holidays, in this case – people would be interested to know whether fraud increases, decreases, or stays the same. What impact, if any, does holiday shopping and everything related to the season have on fraud occurrence?

That’s a question to which we didn’t have an answer. And neither did anyone else, so far as we could find. So we turned to our community of experts – Certified Fraud Examiners (CFE) – and we asked them.

On average, respondents told us that they believe fraud losses increase during the holiday shopping season by nearly 20 percent (compared to the rest of the year). And they think the single biggest contributing factor is increased financial pressure on perpetrators (61 percent), followed by an increased opportunity to commit fraud (24 percent) and increased rationalization for fraud (10 percent). These three factors are represented in Dr. Donald R. Cressey’s “Fraud Triangle” and their presence is considered necessary in order for fraud to occur.

Employee embezzlement/theft is the fraud scheme most likely to increase during the holidays, according to 56 percent of survey respondents – while half of them also reported that fraud by unrelated third parties, such as identity theft and con schemes, will increase.

Another area of concern in the findings: Despite seeing an apparent increase in fraud during the holidays, the majority of our survey respondents reported that their organization does not increase efforts to prevent or detect fraud during this time.

These survey results reinforce the connection between financial pressures and the risk of fraud. The holidays can be wonderful in many ways, yet they can also represent added stresses and pressure that may influence decision-making. During a tough economy, gift shopping might bust the budget. Holiday bonuses may be trimmed down or nonexistent. Job responsibilities and hours might be increased with fewer employees to do the work. These factors could lead to more fraud – which suggests that a certain degree of vigilance by business owners and other organizational leaders is appropriate.

You can read more about the study on Accounting Today. Also, check out the ACFE's Fraud and the Holidays infographic.

I’d like to thank the nearly 900 CFEs who participated in the survey, and also wish everyone a fraud-free holiday season.