Opportunity Perspective for Fraud

Opportunity Perspective

Opportunity Perspective for Fraud

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Opportunity Perspective for Fraud

Fraud is deceptive behavior that results in illegal financial gain for the criminal. In banking fraud the criminal deliberately manipulates banking records in order to obtain illegal financial gain. Fraud is a white collar crime which means it is usually committed by someone acting in the role of a professional, such as a banker. In the banking industry there are many opportunities to commit fraud. Bank fraud can be committed by someone in the bank or someone outside of the bank who manipulate the records of the bank customer (Life Lock, 2013). Similar to any other white collar crime, frauds in the banking industry are opportunities of crime.

The opportunity perspective assumes that particular crimes have particular opportunity structures or conditions that make a white collar crime possible or attractive to a potential offender (Benson & Simpson, 2009). For the bank employee when the proper controls are not in place the opportunity to commit the crime will be attractive to some people. The opportunity structure or conditions that come pair with the banking industry is first a lack of proper security designed to deter both the internal and external threats of the bank. The internal threats are employees willing to steal bank customer’s money while the external threats are security threats that use technological advances to commit frauds against the financial institution.

Bank fraud begins with the motivated offender who is looking to be benefited financially. In this case the fraud will involve the bank owner who takes advantages of loopholes in the law or gaps in regulations in order to commit frauds against consumers. Bank owners will engage in self borrowing, which is prohibited, or develop reciprocal loan arrangements in order to commit frauds against the consumer. Bank owners will also engage in risky loan behavior that could potentially result in harm to the bank customer.

The opportunity structure of the bank fraud involves the owner’s ability to disguise risky loans from bank regulators and examiners (Benson & Simpson, 2009). Since outside audits are rare in the banking business owners are able to get away with frauds against their customers without detection. When the opportunity is readily available and the risk to being caught is limited, a motivated offender will take advantage of this opportunity. In the banking industry this includes the owner, the outside threat, and the employee.

The banking industry deals with large quantities of money that when not properly guarded face all types of threats. Threats come from bank robbers willing to rob the bank by force or the bank employee that changes the deposits of the bank customer in order to embezzle money but only when the opportunity present itself. In order for the money of bank customers to be protected any opportunities must be block in order to stop the motivated offender from accessing the banks money.

References

Benson, M. & Simpson, S. (2009).White Collar Crime: An Opportunity Perspective: Chapter 5,

pg. 91. Routledge, ed.

Life Lock. (2013). What is Bank Fraud? Retrieved August 2, 2014 from

http://www.lifelock.com/education/identity-theft-recovery/bank-fraud/