Financial pressure is driving increased fraud risk for both organizations and consumers. This blog explores how economic instability can push unlikely individuals toward fraud, lessons from past downturns and common scams targeting those under strain.
The Fraud Triangle lays out the common factors that lead people to commit fraud: motivation/pressure, opportunity and rationalization.
Motivation and pressure can come in a variety of ways. Many families across the world live paycheck to paycheck. Essentials, such as groceries and gas, get more expensive in response to geopolitical tension. Some people may lose their job due to layoffs or restructuring at their workplaces, while others deal with pay cuts or other cutbacks to keep their jobs. When employees feel intense fear that they could be impacted by job loss, they often try to boost their performance. Those looking for jobs deal with fewer on the market. Even job candidates moving through the application and interview process are being “ghosted” by employers as job stability and financial relief seemed within sight.
Financial pressure alone does not cause fraud, but it can increase the likelihood that someone rationalizes unethical behavior they may not have previously considered.
According to the ACFE’s Occupational Fraud 2026: A Report to the Nations, out of the fraudsters that displayed behavioral red flags:
The report also showed that 45% of fraudsters were dealing with at least one human resources-related red flag, including:
We can learn a lot about fraud risk connected to economic instability by looking back at times in the past. The last two significant periods of financial struggles and subsequent increases in fraud happened in the late-2000s and in 2020.
From the end of 2007 until the middle of 2009, the Great Recession took place due to market instability worldwide. The impacts were exacerbated in particular in the United States, which faced the subprime mortgage crisis of 2008.
In 2009, the ACFE published Occupational Fraud: A Study of the Impact of an Economic Recession, which found a direct link between economic instability and fraud risk. Many Certified Fraud Examiners (CFEs) discovered that fraud had increased in the 12-month period preceding the study’s survey, and 49.1% believed that increased pressure was the biggest factor contributing to those increases. The report concluded that fraud thrives in times of economic turmoil, as 80.5% of CFEs observed more fraud compared to more stable periods of time.
The world experienced another major economic crisis during the COVID-19 pandemic, which brought dramatically changed business functions almost overnight in 2020. The ACFE’s Occupational Fraud 2024: A Report to the Nations, which examined fraud cases that likely occurred during the height of the pandemic, found that fraud losses increased during the pandemic following an eight-year decline.
Of course, there were many other factors at play that caused these fraud losses during the height of the pandemic, but with the turbulent state of the world at that time, economic instability almost certainly played a significant role.
These periods demonstrate how economic disruption can amplify risk: financial pressure, weakened internal controls, staffing shortages and increased urgency in decision-making.
Beyond the potential of occupational fraud during economic instability, fraud has the potential to affect individuals directly. Fraudsters prey on people in vulnerable positions, and people can feel particularly vulnerable when they have little control over the state of the economy and its impacts on their finances.
Here are a few scams that could impact those struggling right now:
With the economy constantly in flux, both fraud investigators and anyone struggling through financial setbacks must be extra vigilant. Anti-fraud professionals can quickly see an increase in fraud at their organizations as employees dealing with financial pressure feel more desperate. That desperation could also lead those struggling with finances to let their guards down and be victimized by fraudsters looking to capitalize.
