Every time a person ends up misappropriating a company’s financial assets, financial loss can usually be dealt with easily. However, when it comes to fraudulent financial reports, the costs are harder to figure out. If a person who owns a small business creates a fraudulent financial statement, their actual dollar figure will be much harder to trace. In these instances, there will often be fines for misleading investors, and lawsuits filed to reimburse investors. The victim also has to deal with creditor losses, as well as other companies refusing to extend credit to the business. All of these features will result in a devastating financial loss for the company itself.

Types of Financial Frauds

  1. Internet Investment Scam – This type of scam is a take on an illegal depositing activity performed online. This is done through emails and launching of fake Websites. These fake sites are utilized for interaction between users, and making online transactions.

An illegal investment scheme deals with individuals or companies who are involved with securities, trading in future contracts, and giving fund management services, as well as investment advice. These financial frauds are done without the knowledge or licensed by the Securities Commission, under the Capital Markets & Services Act.

  1. Foreign Currency Trading Scams– Those who operate or work with foreign currency trading scams will attempt to make a good impression on possible investors. This is by informing them about a fake marketing strategy, which will promise quick and fast returns. While the scammer is pretending to be a professional investor with a good image and lots of experience, their site will also carry a beautiful layout, alongside advanced IT facilities. In certain instances, investors will even be requested to operate their accounts through the Internet. By using the right tools, such as a TV screen that shows movements in exchange rates, it will give the impression that the site is run by experts and professionals. These facilities are only cosmetic, and they don’t carry a real foreign currency trading office. So if you have been requested to make an investment using foreign currency, then this is most likely a type of foreign currency trading scam.
  2. Check Scams – Each year, there has been a huge increase when it comes to check scams, with the scammers coming up with brand new ways to steal cash. One of these could begin with someone offering to purchase something that the victim has advertised, including a car, or luxury items like jewelries or shoes. The scammer might ask you to do your work at home, or to discuss an apartment rental with you. There will also be instances where you will obtain a check, mentioning that you have a received a small part of a lottery prize placed in a bank with your name. The scenarios for these financial frauds are endless, hence all honest citizens must exercise more caution than ever before, especially when transacting online.

 

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