No . 189 Controlling Financial Services

ISSN 0817-8542 ISBN 0 642 24210 0 In its broadest terms, fraud means obtaining something of value by deception. If fraud were described as an industry, it would clearly be one of the growth areas in the economy. It is also one of the least understood areas of the economy and, because fraud is often viewed as a victimless crime (when perpetrated against large organisations), it does not draw community reaction like other crimes. Similarly, fraud rarely attracts a coordinated political focus on measures designed to address the very serious losses that may result. One hardened criminal who served several periods of imprisonment for armed robbery offences was recently reported to have expressed an opinion to senior police that he wished he had understood earlier in his criminal career how easy it was to commit fraud. He now considers that fraud involves less trauma, the rewards are far greater, and the penalties substantially fewer than in other forms of crime. This paper addresses those forms of fraud that target the financial services sector and how this industry has responded, with some measure of success, to controlling this ever-increasing problem.