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Protect yourself from financial frauds

There was a time when people in general never knew what was meant by the word - “Fraud”. This was the term which probably was known only to accounting professionals.

But nowadays if you happen to visit any book stall I am sure you would encounter many books written on subjects’ like- Fraud detection, Fraud investigation or Fraud prevention etc.

In the morning you open a newspaper and there are good chances that one would certainly encounter with one or two stories related to the occurrence of a fraud at some or other location.

So whether we like it or not this dreading word ‘fraud’ has become an integral part of our money matters.

Why is it so? On my part it would be a bit difficult to reply this question instantly because there are numerous reasons which are responsible for prevalence of fraud in our society.

The dictionary meaning of “fraud” is very interesting because it refers to terms like financial or personal gain. In dictionary the meaning of word ‘fraud’ is stated as follows: “wrongful or criminal deception intended to result in financial or personal gain”.

If we break the above stated definition into two parts: the first part refers to “wrongful or criminal deception”, while the second part refers to “financial or personal gain”.

With ever increasing frauds in financial markets across the world, it seems the lure for quick financial or personal gain has overtaken our duty to abide by the rule of the land.

Nobody seems to be scared of the consequences in the event of breaking a law, but our overindulgence to financial or personal gain has superseded everything else. So the word ‘fraud’ has a love-hate relationship with the human being.

Whether we like it or not this word will continue to haunt us. As per a survey conducted by one of the leading accounting firms, more than 50 percent of respondents said that the following are the factors that might cause individuals to engage in misconduct at their workplace.

The leading reasons to commit fraud are: (1) feel pressure to do ‘whatever it takes’ to meet business targets; (2) believe they will be rewarded for results, regardless of the means to achieve them; (3) believe the code of conduct is not taken seriously; and (4) lack familiarity with the standards that apply to their jobs.

Therefore, with so much of fraud prevalence in our society, how do we achieve the following two objectives: (a) abstain from any kind of fraudulent activity; and (b) how does one protect himself/herself to be the victim of a fraud? Each one of us needs to resolve not to indulge in any kind of fraudulent activity, because the end result would never be good.

Once detected the law for sure will take its own course and your life will get spoilt once proved guilty.

Since you have resolved that you would never be a part of any fraudulent activity, so let us address the second part i.e. how does one protect oneself to be the victim of a fraud?

I admit that there is no readymade solution existing which if applied can shield us from an act of fraud. But in medical terminology there is one phrase which we often use in our day-to-day life.

It goes something like this: “prevention is better than cure”. I don’t think there is a need for me to explain its integral meaning.

The key point is, the referred phrase indicates towards ‘prevention’ which is directly related to the other important word called ‘precaution’. You would definitely get ‘malaria’ if you refrain from using a mosquito net while you sleep. So in simple terms by using mosquito net what you are trying to achieve is a protection from a mosquito bite.

Remember the existence of a mosquito net will protect you but mosquitoes will still wander around in your bed-room. In the similar vein, since we are not able to weed out the fraudulent activities completely, the only way one can protect oneself from its perils is by developing a safety net around oneself. Some simple tips can help you protect yourself and your family from scams. Scams can cost people a lot of money and cause a great deal of distress.

By following these simple tips or call them as Golden Rules, you can protect yourself against most frauds: (1) ALWAYS get independent advice if an offer involves significant money, time or commitment;

(2) remember there are no get-rich-quick schemes: the only people who make money this way are the scammers;

(3) do not agree to offers or deals straight away - tell the person that you are not interested or that you want to get some independent advice before making a decision;

(4) NEVER send money or give credit card or online account details to anyone you do not know and trust;

(5) check your bank account and credit card statements when you get them. If you see a transaction you cannot explain, report it to your bank; (6) keep your credit and ATM cards safe. Do not share your personal identity number with anyone.

Do not keep any written copy of your PIN with the card. I am sure if you diligently follow the above guidelines, you would be able to bypass any potential fraud. So us cross our figures and pray that our hard earned money will never fall into wrong hands. Cheers!!!!

Author: Jagjit Singh

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