Are YOU committing fraud – without even knowing it?

FRAUD is on the rise, with the annual costa staggering £190 billion, but it is not just hardened criminals who are responsible for the increase.

Research by fraud prevention service Cifas shows that one in seven adults has committed – sometimes unintentionally – one or more ‘frauds’. Shockingly, some view certain kinds of consumer fraud as ‘reasonable’.

For example, ‘fronting’ is a tactic often employed by parents looking to reduce the cost of their children’s car insurance. The practice involves a more experienced driver claiming to be the main user of a car that is then driven by a younger motorist.

Almost a third of people have deliberately mis-stated who is the main driver on a policy to obtain a cheaper quote, according to figures from global analytics firm LexisNexis Risk Solutions. Indeed, two in five parents are happy to front if it saves their children money.

Lee Griffin, chief executive of price comparison website GoCompare, says the consequences of fronting are serious. He says: ‘You might think that telling a “white lie” on a policy application is harmless, but withholding or giving false i nformation to obtain cheaper insurance is fraudulent and can result in serious consequences, including a criminal record.

‘ Far from saving you money, being untruthful can be costly should you need to make a claim as it may lead to your policy being cancelled or invalidated.’

Better ways to save on insurance costs include shopping around for cover, choosing a higher excess, or paying the annual cost upfront.

Another ‘white lie’ that can result in people committing insurance fraud is exaggerating an otherwise legitimate claim. This is commonly known as ‘opportunistic fraud’ as it is not premeditated.

Griffin says: ‘Planned or not, exaggerating a claim, such as overstating the value of stolen goods, is illegal and can result in a claim or policy being voided. Together with a fraud charge in court – and the long-term implications that will bring – and you’ll agree it’s definitely not worth taking the gamble.’

So- called ‘ deshopping’, where consumers buy clothes with the intention of wearing them before returning them for a full refund, is another easy way to commit fraud. One in 20 shoppers say they have done this. Few realise it can be deemed an offence.

Consumers should also be aware of ‘ money- muling’, a f orm of money-laundering. This is where someone – the mule – transfers illegally obtained money via their own account into another in exchange for a share of the money. Most money mules are unwitting victims.

Mike Nathan, a senior director at LexisNexis Risk Solutions, says: ‘Individuals can be tricked into this through job ads without realising they are signing up for something illegal. Others are cash-strapped students lured by the idea of making a quick buck.

‘Often, the mule does not even get personally involved, instead handing over their bank login details so the cyber-thieves can handle the transaction themselves.’

Despite efforts to catch mules, as well as educate people on how to avoid becoming one, it is a growing fraud. Anyone caught acting as a money mule, even if done so unwittingly, can be fined, given community service or a prison sentence. It can also prove difficult to open a new bank account in the future.

John Dobson, chief executive at anti- money laundering service SmartSearch, says: ‘ Some see being a money mule as a stressfree, get rich quick scheme. But the consequences can be personally devastating.’