11 Types of Fraud You Should Know in 2026

With the technological developments of recent years, fraud is still a problem not beaten in 2025. AI based schemes and systems make it more difficult to fight against fraud. As sectors like banking, fintech, crypto, e-commerce, and more continue to struggle with fraud, it is important to be more educated about the different types of fraud you can be affected by. In this blog post, we’ll be detailing different types of fraud your company need to be careful against.

1. Identity Theft

Identity theft has been a big problem since AI-driven social engineering and impersonation techniques like deepfakes are advancing in 2025. With this type of fraud, fraudsters first steal your personal information like Social Security number, ID, bank account details, and login information. They then use these to open credit accounts, apply for loans, and file fraudulent tax returns. They also use phishing by sending you deceiving emails and then using this to steal your information. They then use these information to trick someone else. Impersonation is also a big part of these attacks, enabling access to e-wallets and fintech platforms. If your personal information gets stolen, results may be financial loss, damaged credit score, reputational harm, and more. Your company can fight this type of fraud by following through with KYC procedures, having a strong identity verification system, and biometric authentication.

In 2025, Telco Exetel has been fined $694,860 for failing to comply with laws that protect customers from scammers. Scammers were able to gain control of mobile number services and access consumers' bank accounts, with reported losses of at least $412,000. 

2. Credit Card Fraud

Credit card fraud is still relevant since online shopping and digital payments are getting even more popular each year. Criminals use your stolen information to complete transactions. Card-not-present (CNP) scenarios like e-commerce purchases, subscription fraud, or mobile payments are often used to drain your funds. Skimming, where your card data is copied at ATMs, and chargeback fraud, where customers dispute legitimate charges to reclaim fraud, are also used for stealing your money. Our Sanction Scanner experts say that 62 million Americans had fraudulent charges on their credit or debit cards in 2024, with unauthorized purchases exceeding $6.2 billion annually.  Companies fight this type of fraud by implementing real-time transaction monitoring tools into their compliance systems.

Turkish law enforcement has dismantled a sophisticated credit card fraud operation in the popular coastal resort of Kuşadası, leading to the arrest of 20 individuals. Preliminary investigations reveal that a minimum of 268 international tourists were victimized by this elaborate scheme, resulting in financial losses approaching $30 million. The criminal enterprise generated revenues exceeding 1.1 billion Turkish lira ($37 million). 

3. Investment Fraud

This type is fraud is done by criminals giving you false data or promises to make you invest into fraudulent or high-risk ventures, likely leading into loss. They also target members of identifiable groups, such as older investors, or religious or military communities. They act like a part of the community and try to earn trust that way. Ponzi schemes are the most popular example of investment fraud, where earlier investors can only make profits by using funds of new investors, which leads to newer investors losing their funds when the scheme inevitably crashes. Pump-and-dump schemes are also used, where the price of crypto assets or stocks are manipulated to make a big one-time profit, leaving other investors with nothing. 

Crypto scams with fake projects or tokens also affect investors since these projects can deceive them into investing. You as an investor can be affected by these scams because of unlicensed advisors, misleading marketing, or lack of proper due diligence. Since cryptocurrencies and decentralised finance makes it more difficult to invest and not get scammed, relying on regulated platforms and verified advisors will be the solutions which save you from investment fraud.

In 2025, the Spanish Guardia Civil arrested five members of a criminal network engaged in cryptocurrency investment fraud where the perpetrators had laundered € 460 million in illicit profits stolen through crypto investment fraud from over 5,000 victims from around the world. 

4. Insurance Fraud

Insurance fraud is done by giving out false or misleading information knowingly to insurance companies to then get money from them. Fake claims, staged accidents, and inflated or phantom medical billing are the most common cases of this type of fraud. Auto insurance, healthcare, and workers’ compensation categories are the most popular areas for it to be committed. To detect this type of fraud, companies should implement pattern recognition and anomaly detection tools as well as cross check historical claims to make sure you’re not being affected by false claims. 

Between 2013 and 2020, over 67 billion Kenyan shillings ($515 million, €442 million) were lost through fake pension scheme payments in Kenya. 

5. Payroll Fraud

This type of fraud is done by manipulating the payroll system your employer provides. Criminals use this common method called "ghost employees" where they list employees that are paid accordingly but don't work there. Another method is timesheet manipulation where fraudsters put in more hours to the timesheet even though they haven't worked that amount of hours. Dummy accounts these criminals create is another way to steal money from your company, where they miscode payments to divert funds without you noticing. Small and mid-sized enterprises (SMEs) deal with this type of fraud the most. Weaker controls these companies have make it easier to commit these crimes. Therefore, our recommendation for you to avoid these crimes is internal controls, regular audits, segregation of duties, and real time payroll monitoring.

Megan Reynolds, a 29-year-old office manager from Kent, carried out a sophisticated fraud in 2025 worth nearly £100,000 by embezzling company funds through fake invoices, misuse of credit cards, and funneling money via dozens of PayPal accounts. To cover her tracks, she fabricated illnesses, including claims of cancer, pregnancy, and even her dog’s sickness, to gain sympathy and excuse absences. 

6. Online Payment Fraud

Digital transactions are targeted with this type of fraud. Fraudsters may create things called fake checkouts or manipulate payment gateways in a way where funds are misplaced. Account takeover (ATO) attacks also work by using stolen information to make purchases using that account. Buy Now, Pay Later (BNPL) systems are also exploited by fraudsters, signaling more controls should be placed into this system if your company is using it. Multi-factor authentication (MFA) and AI based fraud detection helps fight online payment fraud immensely.

Overall, remote purchase fraud case numbers increased by 22 per cent to nearly 2.6 million, and losses increased 11 per cent to just under £400 million in the UK in 2024. 

7. Loan Fraud

This type of fraud works by fraudsters giving false or exaggerated information to get loans or financing. Forged documents can be used, a company or a person may inflate or fabricate their income, and fake business or personal profiles can be created to secure loans. Fintech lending platforms have made this type more popular since digital onboarding processes can be weak and let fraudsters through. Your company should implement enhanced due diligence (EDD), detailed document verification and automated identity checks if you’re not looking to suffer financial losses, as well as loss of trust in lending services that are digital.

A former NASA scientist has pleaded guilty in 2025 to mortgage fraud after fabricating income records to finance the purchase of an $850,000 luxury home in Texas. 

8. Business Email Compromise (BEC)

Business email compromise fraud involves impersonating executives or trusted partners to trisk employees into letting funds to be moved or revealing sensitive information about your company. CEO fraud is the most popular version of this type of fraud. Invoice scams are also well-known, where fake invoices are given to request payment from your company’s finance departments. These attacks heavily use social engineering, technical complexities are rarely used since human trust is the important factor. Losses of more than $4 billion were recorded for this type. Your company can protect itself by implementing email securit solutions, multi-factor authentication (MFA), employee training, and strong verification processes.

The FBI team uncovered a case where the individuals who were looking to buy a home received a spoofed email from their real estate agents requesting that they wire $956,342 to a U.S. domestic bank to finalize the closing.  The fraudsters used a spoofed email technique to steal money but were stopped by the Recovery Asset Team.

9. Charity and Donation Fraud

You may want to do some good and donate to some charities, but fraud has taken over this category as well. Criminals may create fake NGOs, use unregistered charities, or fabricate disaster relief efforts to collect money from individuals and companies who want to donate some money for a good cause. Crisis-themed campaigns and crowdfunding platforms are also frequently used by criminals. Social media usage may help them promote their campaigns and collect more. You can protect yourself by verifying the legitimacy of charities, confirming registration status, and ensuring a transparent trail of funds.

10. Tax Fraud

Criminals use this type of fraud to reduce tax liability or to evade payment. Underreporting income, inflation deductions, and engaging in complex offshore schemes to hide assets are the most common ways this can be done and your company should be careful and act accordingly. Carousel fraud is also used, this technique involves moving goods to different jurisdictions which helps exploit VAT rules. Shell companies and layering techniques are also used and these obscure ownership and several transactions. Since cryptocurrency is growing rapidly, crypto tax evasion is also on the rise. Tax fraud goes hand-in-hand with money laundering and other financial crimes, and preventing one can lead to preventing the other. Your company can use strong reporting systems, AML integration, transaction monitoring, and regulatory overshight overall to protect yourselves.

RCI Hospitality Holdings and several executives, including the CEO, were indicted in New York in 2025 for participating in a 13-year bribery and tax fraud scheme to evade over US$8 million in sales taxes and it was uncovered in 2025. 

11. Romance & Impersonation Scams

These scams involve a “long con” where scammers build trust with you through friendship or romance over time. Criminals use places like online dating platforms, social media, and messaging apps to exploit you. One of the tactics they use is “pig butchering”, where the person slowly builds trust with you to then use your funds. Deepfake technology and AI-generated profiles are used to create fake profiles, used mostly for impersonation. Cloned voices and video calls are used to make it more believable. Elderly people and crypto users are at risk the most, which may seem like a random combination. Romance scams and impersonation both affect the elderly since they’re not as familiar with the digital world. Crypto users are tricked using techniques like pig butchering to convince them to invest or move funds. Your company can reduce this type of fraud by educating users, verifying identities, and implementing strong KYC and fraud detection measures.

A Belgian man has travelled 760km to meet a French beauty queen for what he thought was a relationship, but was faced with the woman’s husband. The man realised that he was a victim of online romance fraud and relayed that he paid €30,000 (£26,000; $35,000) to scammers. 

Why Identifying Fraud Types Matters

We’ve talked about all these types of fraud and gave details about each since it is important for companies to be educated about the subject to reduce fraud while also protecting your company from penalties. Fraud still causes billions of dollars in losses, including both companies and individuals. Since your company is expected to be compliant with FATF and FinCEN guidance, implementing proactive compliance measures is a requirement. KYC, AML, and transaction monitoring process are recommended because of this reason. AI based detection systems can work with larger volumes of customers and transactions, making your company operate faster and more efficiently. If your company fails to implement these systems and educate employees effectively, both financial losses and reputational damage will unfortunately be awaiting you.

How Sanction Scanner Helps Prevent Fraud

Our Sanction Scanner solution is there to provide a comprehensive suite of tools to prevent fraud and other financial crimes, ultimately helping you reach compliance. Our features like real time AML and fraud detection will help you detect odd activity before it gets more serious. Your customers can be screened against PEP lists, sanctions databases, and adverse media sources, thanks to Sanction Scanner. Our tool also supports KYC and KYB identity verification, which checks both companies and individuals. Since our tool is adapting to technology developments, our AI-driven rules engine and risk scoring system will help you think first of high-risk cases and automate alerts to reduce fraud.