How to identify a fraudster


“In the modern world with technology, interconnectedness and the net, cyber fraud is becoming a significant environment. There’s a fairly lethal cocktail brewing between those three concepts,” Dean Friedman, director of forensics at the professional services firm KPMG told CNBC Africa on Tuesday.

Technology provides fraudsters with the capability of finding ever-increasing ways to scam people however Friedman explained that a study conducted in 2007 and 2011 by KPMG revealed that a number of common characteristics can be used when identifying a fraudster’s profile.

Typically, the imposter is between 36 and 45 years of age, holds a managerial or executive position and is a trusted employee and has been employed at the organisation for six years or more.


“The fraudster is [usually] right in front of our eyes and in our organisation. They are trusted employees that have been there for a long time and you trust them with the assets of the organisation. Our general trust is a shield so you don’t see a mask,” explained Friedman.

While the profile used may assist in catching imposters, he pointed out that the characteristics aren’t always consistent due to environment changes as well as technological advances.   

“There are differences. The environment changes and technological advances are giving a different capability to the fraudsters and a different attribute to them. At the end of the day, there is no consistent profile that will give us a predictive capability to see them,” he added.

Friedman therefore stated that he advises organisations to use the certain fraud drivers along with the profile, such as opportunity, motive, capabilities and circumstances.

“Once the opportunity is spotted, the fraudster has motivation and can rationalise it. They will then ask the question of whether they have the capability to do it and if they do, the capability, the motivation and rationalisation will propel them through the opportunity,” he explained.

Also, the ease of capturing fraudsters will vary depending on which country it takes place as well as the amount of transparency that exists in that environment. The lower the transparency of a business, the harder it is to identify imposters and to estimate how much money was stolen.

Based on KPMG’s experience however Friedman estimated that around 16 per cent of fraud that takes place where there was collusion amongst fraudsters is in value of over 5 million US dollars however it is difficult to estimate the exact amount of money businesses have lost due to fraud.