Understanding Fraud: Numbers, Definitions, and the Fraud Triangle

Abdelrahim Al Aqqad

Chapter Chapter 1 in Fraud Analytics in Action, 2026, pp 3-14 from Springer

Abstract: Abstract Fraud poses a significant and growing threat to organizations across all sectors, with global losses reaching trillions of dollars annually. This chapter establishes the foundational knowledge required for understanding and combating fraud in the digital age. It examines the global scale and economic impact of fraud through recent statistical evidence, underscoring the urgent need for advanced detection approaches. Key distinctions between fraud, abuse, and waste are clarified, providing a structured framework for recognizing fraudulent behavior across industries. The chapter explores the Fraud Triangle—opportunity, pressure, and rationalization—as the core model for understanding why fraud occurs, before extending the discussion to more contemporary frameworks including the Fraud Pentagon and the Fraud and Anti-Money Laundering (FRAML) model. Together, these models reflect the evolving complexity of financial crime in digital environments. By the end of this chapter, readers will have the conceptual and analytical foundation needed to engage with the fraud analytics techniques introduced throughout this book.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-16023-2_1

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DOI: 10.1007/978-3-032-16023-2_1

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