Fraud investigations

A fraud investigation is the process by which a business determines whether or not fraud has occurred, the extent of that fraud, the perpetrators of that fraud, any victims of that fraud, and any damages that resulted from the event. Fraud investigations are commonly initiated in response to suspected money laundering, tax evasion, identity theft, marketplace fraud, and other suspicious activities indicating possible crimes.

Frequently asked questions

Who is responsible for conducting a fraud investigation?

The answer to this question will depend on the nature and extent of the fraud event, as well the industry in which a business operates and the size and maturity of the business. 

In the e-commerce and social media spaces, for example, the trust and safety team may be responsible for conducting a fraud investigation, or it may fall under the purview of the fraud team, if one exists. In the financial space, such an investigation may be a joint effort between the fraud and compliance teams. Certain organizations may even have teams dedicated to specific types of fraud, such as an anti-money laundering (AML) team responsible for investigating cases of suspected money laundering.

Can fraud investigations be automated?

Yes, certain steps of a fraud investigation can likely be automated. Link analysis, for example, is a largely automated process that can help investigators understand whether or not multiple perpetrators (i.e., a fraud ring) may have been involved with the fraud they are investigating. Typically, automation should be used in conjunction with, not in place of, human investigation and manual review.

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