‘Tis the Season – For an Increase in Fraud

Increased financial pressure is the leading reason fraud takes an estimated 20% uptick during the U.S. holiday season, according to a new survey of Certified Fraud Examiners (CFEs). A majority of these experts believe employee embezzlement is the type of fraud most likely to increase during this period.

Increased financial pressure is the leading reason fraud takes an estimated 20% uptick during the U.S. holiday season, according to a new survey of Certified Fraud Examiners (CFEs). A majority of these experts believe employee embezzlement is the type of fraud most likely to increase during this period.  

Conducted by the Association of Certified Fraud Examiners (ACFE), the survey sheds light on this previously under-studied and under-reported area of fraud – whether seasonal pressures brought on during the busiest shopping period of the year lead to an increase in this type of crime. The Austin, Texas-based ACFE is the world's largest anti-fraud organization and premier provider of anti-fraud training and education.  

U.S.-based CFEs were invited to participate in the study, which focuses on fraud committed during the period between Thanksgiving and New Year’s Day. Survey questions focused on whether they observed an increase in fraud during this period, what factors are involved, what types of frauds are most common and whether organizations change their level of resources allocated to fraud prevention during the holidays.  

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Key findings from survey include:  

• On average, survey respondents believe fraud losses increase during the holiday shopping season by nearly 20% (compared to the rest of the year). 
• In terms of fraud occurrence, nearly 80% of respondents believe that the general level of fraudulent activity experienced by ALL organizations will increase (23% believe it will increase significantly, while 56% believe it will increase slightly). Only 12% believe that it will decrease or stay the same (and 9% don’t know).  
• Respondents believe the single biggest contributing factor to be increased financial pressure on perpetrators (61%), followed by an increased opportunity to commit fraud (24%) and increased rationalization for fraud (10%). These three factors are represented in criminologist Donald R. Cressey’s Fraud Triangle and their presence is considered to be necessary in order for fraud to occur.  
• Employee embezzlement/theft is the fraud scheme most likely to increase during the holidays, according to 56% of survey respondents – while half of them also reported that fraud by unrelated third parties (identity theft, con schemes) will increase. Nearly a quarter (24%) of respondents said that frauds by vendors will increase, while bribery (11%) and financial statement fraud (9%) were also expected to increase. (NOTE: multiple answers were allowed for this survey question).  
• Fewer than 7% of respondents said their organization (or their clients’ organizations) increase their level of resources committed to fraud prevention or detection during the holidays. Most said that the level remains the same (56.7%), while more than 9% said that the level actually decreases.  

The survey was conducted online between Nov. 6 – 14, 2012, and completed by 881 CFEs. As experts in fraud prevention in detection, CFEs have passed a rigorous exam and meet yearly requirements for certification by the ACFE.  

Contact the ACFE 
For more information, email PR@ACFE.com.