How to Become a Fraud Investigator – Education & Qualifications

Fraud investigation is the research of intentional criminal deception and involves civil and criminal examination methods.

Most fraud investigators work in corporate or government-based institutions. Duties vary greatly, and the skills required include: conducting independent research of claims, examining the evidence, interviewing victims, and questioning potential perpetrators.

With the rise of identity theft and cybercrime, fraud investigators interview victims of fraudulent electronic transactions and interact directly with complainants and law enforcement officials. Additionally, fraud investigators communicate with employers, witnesses, and complainants. Along with the criminal justice system, they serve and execute search warrants, conduct surveillance, collect evidence, and make statements under oath in courtroom testimonies. Fraud investigators also work with attorneys and prosecutors in consultative legal capacities.

Fraudulent crime has changed drastically over the years, but knowing the origins gives fraud investigators a historical framework to solve crimes. To this point, JSTOR Daily, explains that the historical origins of financial fraud began in goats’ bellies. In the 16th century, bezoar stones, once worth more than their weight in gold, were thought to cure common ailments and be antidotes to poison, but most were fakes. In this era, the legal doctrine of caveat emptor, or “buyer beware,” became a phrase amongst courts and consumers.

With identity theft and cybercrimes rising in the 21st century, the need for qualified fraud investigators to investigate, prosecute, and prevent fraud-based crime is high. The US Bureau of Labor Statistics (BLS) predicts that careers in financial examination will grow 21 percent nationally between 2021 and 2031. This rate is four times faster than the national average (5 percent) and estimates that 13,200 new positions will be created (BLS 2022).

In addition, statistics from the Insurance Information Institute show no shortage of cases to investigate; in 2021, the Federal Trade Commission received 5.7 million identity theft and fraud reports, a 16 percent increase from 2020.

To maintain the societal and ethical integrity of a country’s economic and political systems, trained fraud investigators are necessary for the overall financial health of individuals and organizations.

Read on to learn more about how to become a fraud investigator.

Skills & Personality Traits of Successful Fraud Investigators

Fraud investigators must work independently and have specific written and verbal communication skills. Additionally, the qualifications of potential fraud investigators include the ability to conduct interviews, write legal reports, take statements, and collect, organize, document, and preserve evidence.

The ability to communicate ethically and objectively is essential for fraud investigative professionals. Because fraud investigators are ombudspeople interacting with fraud victims, potential perpetrators, legal professionals, judicial government agencies, and law enforcement officials, objectivity is a crucial communication skill.

Investigation of cases involving intentional deceit requires a specialized skill set. Below are some essential skills and personality traits of fraud investigators:

• A genuine interest in maintaining legal, financial, and ethical standards – Fraud investigators are tasked with helping individuals and organizations solve and maintain their social, financial, and moral integrity.
• A degree in forensic accounting, criminal justice, or a related field – Professionals with an educational background in forensic accounting have an advantage in knowing the motives behind criminal behavior and how to prevent fraud. People with professional legal knowledge use their skills to inform their investigative work.
• Previous military or law enforcement experience – Individuals apply previous experience with intelligence and investigation and their abilities to follow standard safety protocols with objective documentation.
• Knowledge of Internet-based crimes, legal and corporate investigation, and financial analysis – Fraud investigators use their cross-disciplinary knowledge to specialize their skills for specific professions in the above-mentioned areas.
• Inquisitiveness – People who investigate fraud must ask and formulate questions on the spot when investigating fraud claims.
• Persistence – Professionals investigating fraudulent claims must thoroughly investigate every lead related to their assigned case.
• Patience: fraud investigators spend multiple hours doing surveillance or questioning leads and have to expect that cases will not always resolve quickly or at all.
• Exceptional writing and speaking skills – Fraud investigators determine legal and ethical faults. In addition, they may be called upon as a witness in a criminal or civil trial and, therefore, must be able to listen carefully and speak precisely and objectively.

Role Requirements for Fraud Investigators

The Association of Certified Fraud examiners lists four major career pathways for fraud investigators, which are as follows:

• Accounting – Forensic accountants are trained to use investigative skills for litigation and other roles and ensure financial compliance and accurate record-keeping.
• Auditing – Auditors in fraud investigation conduct formal reviews of an individual’s or an organization’s financial records, security protocols, information systems, and performance audits.
• Governance, risk management, and compliance – The fastest growing sector of the fraud investigation career, professionals with this specialization are responsible for management structure, risk control, and regulatory compliance.
• Investigation – Divided into public and private sectors, fraud investigators in the public sector work for federal, state, or local law enforcement. In contrast, private investigators maintain independent practices and work in loss prevention or internal/external fraud analysis.

Other types of fraud investigation specialization involve insurance claims fraud, computer-based commerce fraud, identity theft, and civil and criminal investigations involving citizens or corporations.

The specialized pathways for fraud investigation include specific professional roles and duties:

• Interviewing people to gather information
• Collecting evidence to present in court or for a client
• Conducting surveillance
• Searching public or court records to check for criminal history
• Investigating information theft and computer crimes
• Verifying employment and income
• Researching claims to ensure compliance with insurance policies
• Preparing evidence for legal use
• Conducting background checks on prospective employees and financial professionals
• Investigating the business practices of external corporate partners

Steps to Becoming a Fraud Investigator

Here is one pathway to pursue a career in fraud investigation:

Step 1: Earn a bachelor’s degree in forensic accounting, criminal justice, or a related field (four years)

After graduating from high school, prospective fraud investigators can enroll in a community college or university degree program and study forensic accounting, criminology, fraud investigation, social and political science, or other cross-disciplinary studies.

An example program is the online bachelor’s degree in fraud investigation offered by Utica University. This 120-credit program prepares students with knowledge and practice to detect and prevent fraud from a holistic approach. Courses include criminal justice, ethics, law, and sociology, among others. In addition, students in this program can choose from a financial investigation or fraud prevention and detection concentration to deepen their studies. This program is an educational partner of the Association of Certified Anti-Money Laundering Specialists (ACAMS), which offers a Certified Anti-Money Laundering Specialist certification.

• Location: Utica, NY
• Duration: Four years
• Accreditation: Middle States Commission on Higher Education (MSCHE)
• Tuition: $450 per credit

Students in these programs are encouraged to seek hands-on experience through internships or part-time work to gain a well-rounded educational experience and prepare themselves for a career in fraud investigation.

Step 2: Get some experience in the field (one to three years).

A wide variety of career, internship, and other hands-on opportunities are available to aspiring fraud investigators with a degree in forensic accounting or related educational background.

Graduates can find job opportunities on the Association of Certified Fraud Examiners (ACFE) website. To qualify for certification, candidates must have relevant professional experience in loss prevention and apply and take the exam to become a Certified Fraud Examiner (CFE).

Step 3: Pursue certification through a professional organization (less than one year)

Two prominent certifying organizations for fraud investigation professionals are the Association of Certified Fraud Examiners (ACFE) and the International Association of Special Investigations Units (IASIU).

The ACFE is the world’s largest anti-fraud professional group and offers a credentialing exam exclusively for its members to earn their Certified Fraud Examiner (CFE) credential.

Members of the IASIU abide by a code of ethics and have access to three certification programs for insurance fraud specialists: the Certified Insurance Fraud Investigator (CIFI) program, the Certified Insurance Fraud Analyst (CIFA) program, and the Certified Fraud Representative (CIFR) program.

Both organizations offer professional development, career listings, and annual conferences to develop skills and widen professional networks. Credential holders must recertify every three years.

Step 4: Pursue a graduate degree (two to four years; optional)

A graduate degree is typically necessary for pursuing research and leadership opportunities.

An example of a master’s program in fraud examination is West Virginia University’s (WVU) online master’s of science degree in forensic and fraud examination and an online forensic and fraud accountant graduate certificate. Students in this 30-credit program take ten courses in fraud examination, investigation, data analysis, criminology, a sample of online MBA courses, and analytical techniques. In addition, experiential learning is emphasized through virtual residencies and mock investigations.

WVU’s John Chambers College of Business and Economics is accredited by the Association to Advance Collegiate Schools of Business (AACSB) and can be completed in a year. An ACFE exam prep course is included in the tuition to prepare graduates for the CFE exam.

• Location: Morgantown, WV
• Duration: 12 to 24 months
• Accreditation: Association to Advance Collegiate Schools of Business (AACSB International)
• Tuition: $558 per credit

Master’s and doctoral candidates wishing to teach or earn higher positions can expect to attend seminars, conduct research, and complete oral or written exams in addition to their final master’s research project or PhD dissertation.

Step 5: Join a professional organization (timeline varies)

Finally, fraud investigators in the U.S. should consider joining a professional organization. These groups offer professional development opportunities such as networking, continuing education, and opportunities to attend conferences. Here are some of the professional organizations related to fraud investigation:

• Association of Certified Fraud Examiners (ACFE)
• International Association of Special Investigations Units (IASIU)
• National Society of Professional Insurance Investigators (NSPII)