By Russell G Smith

This Handbook seeks to provide a comprehensive review and analysis of the current state of research into fraud and society, drawing on the work of 30 internationally recognised scholars and practitioners in economic crime research from across the globe. Fraudulent and dishonest conduct has been present in society throughout history with people in both developed and developing societies using dishonest practices to obtain some advantage for themselves, or to avoid suffering a loss for which they are legally responsible. In pre-industrial times, dishonest practices focussed on many of the same targets that are still present today—deceiving spouses and family members to facilitate infidelity or claims to inheritance; obtaining goods and services without proper or adequate payment; passing off defective products in place of products of an acceptable standard; or obtaining a benefit through trickery or deceit. They all entail tricking the victim into believing in a state-of-affairs as represented by the offender that is eventually revealed to be far from the truth.  

As society developed and economic activity became more sophisticated, fraud and dishonesty offending became more complex and more able to be disguised to avoid detection. Increasingly complex business structures have allowed individuals to trade dishonestly by using corporate entities to shield themselves from personal liability. Responsibility is shifted to incorporated bodies, making it difficult—or even impossible—to identify those at fault and reducing the likelihood of recovering debts. The presence of the corporate veil was, arguably, one of the greatest boons to fraud in history.

The stage was then set for the introduction of electronic communications in the mid-nineteenth century that greatly facilitated all forms of fraud and dishonesty. Fraudsters no longer had to rely on face-to-face contact to deceive their victims with all the attendant risks of detection and conviction that this entailed. They could pretend to be someone else (even the dead) disseminate falsehoods far and wide at minimal cost, and make themselves unable to be located once the fraud had been committed and the authorities notified.

Fraud has become, and remains, the most-costly crime category of all in terms of its impact on economies as well as the harms caused to individual victims. It is often a hidden crime and is hard to detect—and sometimes is, indeed, never detected such as is the case with charity fraud in which unsuspecting donors present their gifts to entities that are unrelated to the intended recipient—leading to the donation being stolen by the offender. Even where losses are apparent, offenders may have hidden their activities with such sophistication that official action is impossible, or so costly to undertake that victims are unable or reluctant to send good money after bad in seeking recovery of their losses. If losses are relatively low, then the legal and other costs of investigation and prosecution often make criminal action—and also civil action—unviable.

Fraud offending, accordingly, remains as much an intractable problem today as it was centuries ago. Strangely, however, societies seem to have tolerated this situation with equanimity as governments, businesses, and individuals often see fraud as an inevitable risk of living and doing business in a modern, complex, economic environment. Large corporations, financial institutions, and revenue authorities usually insure against, or budget for fraud losses that they believe will inevitably occur and never be recovered—despite extensive expenditure on fraud prevention, detection, and response activities.

Similarly, research into fraud has, until very recently, had an exceedingly low profile among academic scholars and their students with the vast majority of researchers and research funding bodies in criminology, law, economics, accountancy, sociology, and psychology—to name a few relevant disciplines—choosing to focus their efforts on conventional violent crimes, street crimes, and other high-volume crimes rather than economic, white collar, and other forms of illegality involving fraud and dishonesty. This problematic situation is, however, beginning to change due largely to the advent of cybercrime that has transformed economic crime into a new variant of volume crime that can also entail personal violence and social harm—such as cyber-enabled sexual abuse, family violence, online child abuse, cyber-enabled kidnapping, extortion, and relationship scams. The Internet has created an environment in which dishonesty and deception can be perpetrated with ease—sometimes from home—and take place on a massive, international scale yielding substantial profits for those who develop and disseminate deceptions as well as those who implement such novel methods of electronic theft.

The present Handbook seeks to understand how fraud offending has developed and changed over time. The contributions consider how offenders’ motivations and justifications for acting dishonestly have altered, what changes have taken place in the experiences of victims of fraud, and how society has responded to the problem through the use of criminal justice action—as well as using technologies—some of which were designed to prevent fraud in the first place.

The chapters included in this Handbook are, of necessity, selective, focussing on the most salient, current, and novel topics that have been the subject of recent research. Not every fraud modality has been examined, and not every response strategy reviewed. Instead, examples have been carefully selected to illustrate the latest, and most pressing areas of concern and the most recent approaches used to address fraud affecting society. As such, the content will, hopefully, enable those charged with responding to fraud in modern societies—be they public officials, risk management personnel in businesses, criminal justice staff, or individuals who are the targets of dishonesty—to be informed concerning the nature of the current risks they face, be alert to the developing risks of the future, and be armed with strategies to use to avoid being defrauded in the years ahead. Each of the chapters has its own unique answers to the question of how not to be deceived by fraudsters. If understood and implemented, the use of proactive fraud prevention measures may help to reduce some of the vast, wasted resources caused by fraudulent and dishonest practices in modern societies.

The Handbook makes clear the continuing problem of fraud in society and the results from the considerable research literature have led to the conclusion that not a great deal has been achieved in reducing the problem. The benefits of some fraud prevention achievements have, unfortunately, been masked by the negative effects of technology-enabled fraud that has made consumer fraud, in particular, of greater concern than decades ago. Similarly, corporate and public sector fraud have also been made easier to perpetrate through the manipulation of large data holdings and the compromise of personal information stored digitally. At the same time, policing of fraud in the 21^st century has been improved through new AI software and electronic monitoring systems that have made detection more rapid—although sometimes with increased risks of error and mistake. Although much has been achieved, and still more remains to be done, the problem of fraud in society would have been far worse today than in the past had the continuing efforts of the counter-fraud community not been undertaken.

The Research Handbook on Fraud and Society by Russell G Smith will be available to read as a Hardback and eBook in May 2026. Learn more.

This is an edited version of the introductory chapter to the Handbook written by Russell G Smith, a Professor in the College of Business, Creative Arts, Law, and Social Sciences at Flinders University in South Australia and an Honorary Fellow at the Australian Institute of Criminology. He has served as President of the Australian and New Zealand Society of Criminology and was elected a Fellow of the Society in 2016. In 2023 he received the Gil Geis Lifetime Achievement Award from the Division of White Collar and Corporate Crime of the American Society of Criminology.