Some industries suffer higher fraud losses than others, according to research by the Association of Certified Fraud Examiners (ACFE). ACFE found in their Occupational Fraud 2026: A Report to the Nations, the median fraud loss per incident for the mining, real estate, energy, and wholesale trade sectors is $220,000 or higher. For the education, utilities, and retail industries, the median loss per incident is less than $60,000.
The most common fraud schemes also vary by sector. For instance, manufacturers and retailers often experience elevated rates of inventory theft, and health care businesses are at greater risk of billing fraud. To help you prevent and detect criminal activity — and reduce financial losses — here’s a glimpse at industry specific fraud risks and practical ways to address them.
Banking & Financial Services
Although the median loss per incident in banking and financial services ($100,000) isn’t unusually high, this industry reports more incidents to the ACFE than any other. Federal Reserve Financial Services also recently warned of “widespread and intensifying fraud challenges across the U.S. financial ecosystem.” Some of the biggest threats to financial services organizations are corruption and cash-related schemes.
In this sector, occupational fraud is most often discovered through tips (40% of cases). So, if your organization doesn’t offer a confidential reporting tipline or web portal, make one available as soon as possible. Also invest in employee training and education, which the ACFE has found to reduce fraud losses when theft occurs. In addition to potential internal fraud, your workers need to know how to recognize the many scams perpetrated by hackers, criminally-minded customers, and other outsiders targeting the financial sector.
Food Services & Hospitality
The food services and hospitality industry also experiences median losses of $100,000 per fraud incident. The biggest threats are corruption and billing schemes, particularly vendor fraud. It can be hard for managers to keep track of the daily stream of deliveries, which shady vendors might exploit by inflating their bills to reflect more or pricier items than they delivered. If vendors collude with employees, theft losses can be even more consequential.
Successfully combating fraud generally takes a multipronged approach. Monitor receiving and accounting employees and investigate any close relationships with vendors. You might also conduct background checks on new hires, install video surveillance throughout your facilities, and watch for behavioral red flags, such as employees who don’t take time off or always seem flush with cash.
Contractors & Construction
The median fraud loss for construction businesses is $120,000 per incident. Billing fraud, corruption (including kickbacks and bid-rigging), and noncash fraud (such as theft of materials) are more prevalent in this industry.
Segregation of accounting duties — requiring them to be performed by more than one employee — is critical to reducing billing schemes. Kickbacks and bid-rigging can be discouraged with extra scrutiny. For example, if you notice your company is suddenly winning bids that it hasn’t in the past, verify that employees are following your bid procedures. And consider hiring security personnel and installing cameras to protect assets on building sites. Expensive equipment can be secured with tracking devices. Surprise jobsite visits are usually another effective antifraud control.
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These examples show how fraud risks can vary by industry. However, every business should evaluate its specific vulnerabilities and use that assessment to implement effective controls. Contact us for help.
