Redefining fraud: a technological conversation worth having.

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Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

In 300 B.C a Greek merchant by the name of Hegestratos committed fraud. At the time, large insurance policies were referred to as bottomry, which Hegestratos was familiar with and had under his name. Simply put, bottomry is where Hegestratos would borrow money and agree to pay it back with interest when his cargo—in one specific case, corn—is delivered. If Hegestratos can’t pay back the loan, the lender would legally acquire his boat and cargo. Hegestratos planned to sink his empty boat, hold onto the loan and sell his corn. His scam failed and he drowned trying to escape from his crew when they figured out what was happening.

In 1793 a few years after the United States fought off the British and won their independence, the first case of what would eventually become insider trading was recorded. Fraud in England, was considered a capital offence in 1850 and could lead to public execution, exile to various colonies (Australia) or fire branding.  Finally, moving into the stock pools of the 1920s that took advantage of the average Americans; moving through the birth of the modern day CSE, a legal jump forward in regards to a solution to fraud.

All of this to say that the way we understand and engage with fraud has changed over the course of few hundred years, as have the institutions created to curb such activity. The one common thing that can be found in our changing definition of fraud is the way society interacts with the actual activity. Technology has been at the center of all of this; fast paced growth extended the nature of what we ever thought was capable in terms of manipulating the average human being.

So then, today. Fraud is seeing a growth in prevalence in part due to our own devices. Technology is moving faster than ever in terms evolution and some would argue a potential revolution. I think there’s room to have a conversation about how we define and interact with fraud and moving forward in a society that shows no signs of slowing down. What this conversation sounds like and what the solutions are, is up for debate. But the fact that there’s a question of this in the air in 2017, propels a need to have the conversation in the first place.

It’ll be an interesting one that’s for sure. We even started to have it in some small scale places. Fighting back against scammers and fraudsters by using technology. Re:scam for example, which we wrote about recently. Re:scam is a great example of a crucial part the eventual conversation; the way we respond to technology driven threats needs to evolve as well. And to me responses are guided by a common sense driven narrative.

It’s the everyday innovations that will help us get a handle on how we respond to fraud and scams in a way that makes the most sense for the average consumer. A new program Simility, is like this in its ability to use comprehensive algorithms to help detect fraud before happens. Similar to a piece we wrote in October about machine learning and the companies at the forefront of fraud protection, it changes the way he rationalize the nature of fraud and certainly makes things easier to understand which in turn helps us connect on with these concepts on a clear level.

Trusting the gut first and researched information regarding your specific situation, second, often these two steps are connected and happen fairly quickly in response to the other, but there are situations where it takes time. The $17 million lost last year to romance scams is a great example of a long-term scam that isn’t intuitive and easy to pick up on, so those two steps in quick succession don’t always happen.

It’s also looking to trusted resources to maintain a healthy interest in what’s going on in the fraud-specific news. At Canadian Fraud News Inc, we’re always trying to create a better sense of community through our writing. That means trying to stay up-to-date on what’s happening under the fraud umbrella. We look forward to having that conversation with you.