Victim and pursuer

Starting Out: For new and budding fraud examiners

Other than physical trauma, there's no more crippling feeling than having all your money stolen. A fraud victim's emotional, psychological and physical reactions can be similar to major trauma crimes. (See Victims of Fraud: Comparing Victims of White Collar and Violent Crime, by Linda Ganzini, M.D.; Bentson McFarland, M.D., Ph.D.; and Joseph Bloom, M.D., Bulletin of the American Academy of Psychiatry and the Law, Vol. 18, No. 1, 1990.) Yet, for some, it's an impetus to join the anti-fraud cause so that others won't be victimized. In this column, Chloe Pickering, a recent graduate from the U.K., describes her story — first as a victim and then as an aspiring fraud examiner. — Colin May

I knew little about fraud before I became a victim. I only read stories about it in newspapers or watched fraud-themed shows on TV. I assumed it would never touch me, but I was wrong. I was a victim of fraud twice within three years while I was a university student. My misfortunes spurred me to conduct a major research project on fraud in my final year at university.

I've discovered that fraud is extremely widespread and anybody can be a target. I'm now much more aware of the ever-growing risks of these crimes. My experiences could have scarred me, but I've decided to flip the negative into a positive and educate others — especially students — about the methods they can adopt to reduce their likelihood of becoming fraud victims.

Scheme one

In late February 2012, six months after starting university, I wasn't able to withdraw cash from an ATM because of insufficient funds, according to the message on the machine. I was confused; I was certain my bank account wasn't overdrawn because I had bought something with my card just the day before. I checked my account online and found some purchases I hadn't made: a payment to Tesco (a large grocery store chain) and another to Flybe (a British low-cost regional airline).

I had lost $529.73 in a little more than 24 hours. I was shocked and angry and couldn't understand how the bank didn't notice such markedly unusual transactions and flag them as potentially fraudulent.

I now had to prove to the bank that the purchases weren't mine. I filled out numerous forms with details of my whereabouts at the time of the two transactions so I could prove that I couldn't have authorized them. Finally, two months later the bank fully reimbursed me. The bank didn't attempt to guess who it thought had compromised my account. It seemed that once the bank had fully reimbursed me, it believed that it had done everything that was required and it would leave any investigation to the police.

I attempted to report the fraud to the police, but they quickly told me that they couldn't help because it was strictly a "bank matter." Of course, I was frustrated because bank officials frequently had asked me if I had reported the fraud to the police. I couldn't figure out who was responsible for helping victims like me. I didn't yet know about victim-assistance organizations (such as the U.K.'s Action Fraud), so I felt deserted and helpless. On top of that, I knew the person who had stolen from me never would be punished.

After this fraud, I began to only use the ATM machine within my bank instead of the street machines, which fraudsters can easily tamper with. I lost confidence in the police and my bank, and I had to borrow from my parents until the bank reimbursed me.

Scheme two

Unfortunately, my efforts to change my behavior and reduce my risk of becoming a fraud victim again were in vain. Almost exactly two years later, I received a text from my bank asking me to verify recent activity on my debit card. I confirmed that I hadn't authorized the transaction in question, and the bank immediately blocked my card. When a bank representative called, I was relieved to learn that the money for this transaction hadn't left my account. However, the bank said that this wasn't the only attempted fraudulent transaction on my account.

Again, I was angry and confused. Why was I a victim a second time? Was I being personally targeted? I became even more nervous and paranoid whenever I used my card because I feared that someone was watching me enter my PIN number. The bank never conjectured on how the fraudsters might have stolen my money.

Fortunately, this time my bank contacted me before any money had left my account. Apparently, the bank was a bit more proactive. However, I still don't know how either of these frauds were committed, and because the perpetrators — to my knowledge — haven't been caught, they're probably still ripping off honest people.

The research

I dedicated my final-year university project to discovering the incidence of fraud among my fellow students. As far as I could determine, little research in the U.K. had been done in this area.

I distributed a survey comprised of 28 questions to 2,175 students at the University of Portsmouth. I wished to contact the entire student body, but the school gave me permission to email the survey only to first-, second- and final-year students who were studying sociology and criminology-related subjects. A total of 110 females and 50 males responded — a 7.4 percent rate of return.

Because this project formed part of my undergraduate dissertation, my supervisor from the university's Center for Counter Fraud Studies checked the results of my primary research. This project was just a start, but I believe it signals some interesting trends.

These were my aims:

1. To discover if students are aware of their increased vulnerability to fraud victimization.
2. To establish the number of students who have been victims of fraud.
3. To discover the type of fraud of which students are most likely to be victims.
4. To ascertain whether students are aware of the various agencies available to report a fraud.
5. To uncover whether students place themselves at an increased vulnerability to fraud victimization.

The findings indicated that students are unaware of their increased vulnerability to fraud victimization. Most students said they considered the elderly to be most at risk. Only those who had been fraud victims believed that university students were most at risk. Also, less than 10 percent of the students in this study had been targeted by fraudsters and were particularly vulnerable to credit card fraud more than any other type. (This percentage is quite low but I believe this was primarily because I only had access to a small proportion of students at the University of Portsmouth, which greatly reduced the likelihood of me being able to uncover a large number of students targeted by fraud.)

The majority of students who had been victims reported their fraud. However, they had a neutral opinion on the helpfulness of the agencies to which they reported the crimes.

Finally, in comparison to other research — which claims that university students engage in certain risky behaviors that makes them more vulnerable to crime (for example, read the 2004 study, University Student Safety in the East Midlands, by Rosemary Barberet, Bonnie S. Fisher and Helen Taylor, U.K. Home Office Online Report 61/04) — the students in this study were much less likely to exhibit specific risky behaviors while online and in social settings (i.e., interacting face-to-face with others). The students reported that their only risky behavior was that they were more likely to use the same password for two or more Internet sites. 

Lessons learned

Fraud examiners can learn four key lessons from my experience as a fraud victim and also the findings from my research.

1. It's imperative that the risk of fraud is publicized widely among student populations — especially vulnerable, first-year students who might be responsible for managing their finances for the first time.
2. Specific fraud agencies, such as the U.K.'s Action Fraud, need to be widely promoted among students so they know they have someone to turn to if they're victims.
3. Students must be informed about specific preventative behaviors they can adopt while online and in social settings to help reduce the risk of becoming victims.
4. Most importantly, authorities shouldn't ignore fraud that affects higher-education students with their specific vulnerabilities. Anti-fraud agencies and practitioners must further examine and investigate these crimes to obtain a more accurate picture of how they affect students and how to prevent and deter fraud.

Future in the anti-fraud world

Eventually, I hope to become a fraud examiner and work alongside experts to help reduce fraud around the world. As a fraud victim, I'll be able to offer unique insights into fraud examinations.

I also aim to earn the Certified Fraud Examiner credential to continue my anti-fraud education and assist other victims in their quests to get answers and recover from these horrific events.

Chloe Pickering graduated in July 2014 from U.K.'s Portsmouth University with a combined honors degree in sociology and criminology.

Colin May, CFE, is a forensic financial investigator with a government agency (the views in "Starting Out" are his own) in Baltimore, Maryland.

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