The Impact of Detection Methods on Fraud Duration

The Association of Certified Fraud Examiners (ACFE) has conducted a study examining how different fraud detection methods affect the duration of fraud schemes. This research highlights significant differences in the effectiveness of passive versus active detection strategies.

Passive detection methods—those in which fraud is uncovered inadvertently or through external notifications, such as police alerts or even fraudster confessions, while capable of identifying fraud, often only do so after substantial time has elapsed, leading to prolonged fraudulent activities.

Active detection methods, such as document reviews and surveillance, are designed to identify fraud swiftly. As a result, they are significantly more effective at reducing the duration of fraud schemes, catching illicit activities much earlier than passive methods.

This research underscores the critical need for organizations to implement and maintain active detection strategies to significantly reduce the time frame of fraudulent activities, thus limiting their potential to inflict financial and operational damage.

Thank you to the ACFE’s Report to the Nations!