What Is Credit Card Fraud, And How Do You Prevent It?
What Is Credit Card Fraud, And How Do You Prevent It?
Controlling credit card spend is a challenge for any construction team, and the complexity increases as your company grows. You set card limits and expense policies, but these are tough to enforce when you can’t see spending in real time. Your finance team has a limited bandwidth, and your credit cards and ERP don’t sync automatically. It’s no surprise that enforcing spend rules feels like an uphill battle.
This is a common story across the industry. So it's unsurprising that construction organizations reported a median fraud loss of $120,000 per incident, ranking among the highest of any industry studied, according to the ACFE's Occupational Fraud 2026: A Report to the Nations. When the ACFE rolled out its report this year, we checked how construction had fared in the two year interval since their last report. Turns out, fraud has gotten worse.
Controlling credit card spend is a challenge for any construction team, and the complexity increases as your company grows. You set card limits and expense policies, but these are tough to enforce when you can’t see spending in real time. Your finance team has a limited bandwidth, and your credit cards and ERP don’t sync automatically. It’s no surprise that enforcing spend rules feels like an uphill battle.
This is a common story across the industry. So it's unsurprising that construction organizations reported a median fraud loss of $120,000 per incident, ranking among the highest of any industry studied, according to the ACFE's Occupational Fraud 2026: A Report to the Nations. When the ACFE rolled out its report this year, we checked how construction had fared in the two year interval since their last report. Turns out, fraud has gotten worse.
Credit card controls are not created equally
You likely have card controls in place as standard company practice. But most commercial card programs were invented for the broader market rather than the construction industry. These programs have intrinsic limitations like static credit limits and monthly statements. Meanwhile, questionable transactions slip through the cracks and go unnoticed.
In construction, the median fraud scheme lasted 12 months before detection. Expense reimbursement schemes specifically lasted a median of 18 months before being detected, meaning the average construction company absorbs a year and a half of losses before anyone catches the pattern.
One-third of all fraud cases occur due to a lack of internal controls, with another 19% resulting from an override of existing controls, and 18% from inadequate management review. Collectively, these three weaknesses account for ~70% of all fraud cases. None of this is sophisticated fraud, but it’s hard to catch without the right commercial card and card controls.
Credit card controls are not created equally
You likely have card controls in place as standard company practice. But most commercial card programs were invented for the broader market rather than the construction industry. These programs have intrinsic limitations like static credit limits and monthly statements. Meanwhile, questionable transactions slip through the cracks and go unnoticed.
In construction, the median fraud scheme lasted 12 months before detection. Expense reimbursement schemes specifically lasted a median of 18 months before being detected, meaning the average construction company absorbs a year and a half of losses before anyone catches the pattern.
One-third of all fraud cases occur due to a lack of internal controls, with another 19% resulting from an override of existing controls, and 18% from inadequate management review. Collectively, these three weaknesses account for ~70% of all fraud cases. None of this is sophisticated fraud, but it’s hard to catch without the right commercial card and card controls.
The margin gap
Thin margins shape every decision in construction; staffing priorities, bids, project budgets. Margin erosion from fraud can be the difference between a good year and a bad one.
It's natural to build spend controls that target outright fraud we can anticipate: things like personal expenses and big one-off purchases that stand out on a bank statement. There is a second layer of silent losses that are so construction-specific they frequently fall through the cracks, even for the most vigilant teams. What happens when a payment is miscoded intentionally on an expense report? Or when a series of duplicate purchases pass by human eyes unnoticed?
Misallocated overhead costs affect 10-11% of projects and can destroy margins that were already thin. Uncoded or miscoded field expenses distort work-in-progress schedules by understating actual job costs, inflating estimated profit, and skewing over/under billings. Spend coding errors today becoming estimating errors in the next bid.
The benchmark gap
The 2026 ACFE report puts a concrete value on the types of stricter card controls. In general, organizations with proactive data monitoring in place experienced median fraud losses of $70,000. Those without it absorbed $150,000, or more than double.
That $80,000 difference is the cost of staying passive.
Organizations with a formal reporting mechanism detected fraud in 11 months. Those without one took 17 months. That six-month gap represents roughly $56,400 in additional losses at $9,400 per undetected month.
The margin gap
Thin margins shape every decision in construction; staffing priorities, bids, project budgets. Margin erosion from fraud can be the difference between a good year and a bad one.
It's natural to build spend controls that target outright fraud we can anticipate: things like personal expenses and big one-off purchases that stand out on a bank statement. There is a second layer of silent losses that are so construction-specific they frequently fall through the cracks, even for the most vigilant teams. What happens when a payment is miscoded intentionally on an expense report? Or when a series of duplicate purchases pass by human eyes unnoticed?
Misallocated overhead costs affect 10-11% of projects and can destroy margins that were already thin. Uncoded or miscoded field expenses distort work-in-progress schedules by understating actual job costs, inflating estimated profit, and skewing over/under billings. Spend coding errors today becoming estimating errors in the next bid.
The benchmark gap
The 2026 ACFE report puts a concrete value on the types of stricter card controls. In general, organizations with proactive data monitoring in place experienced median fraud losses of $70,000. Those without it absorbed $150,000, or more than double.
That $80,000 difference is the cost of staying passive.
Organizations with a formal reporting mechanism detected fraud in 11 months. Those without one took 17 months. That six-month gap represents roughly $56,400 in additional losses at $9,400 per undetected month.
Three questions that prevent credit card fraud
When did you last review your credit card controls, and whether they’re sufficient for current business needs?
Do you know your exception rate and average detection time lag? If a pattern of off-policy spend started today, how long before your card program would surface it?
Is your card program generating usable data about who is in or out of compliance?
Construction spend control is specific and requires a well-designed commercial card program that does two things: prevents fraudulent transactions and produces insights to counter irregular fraud.
When indirect costs default to G&A instead of being correctly allocated to specific jobs, the job's costs are understated and the G&A line inflates simultaneously. The distortion runs in both directions, and it doesn't show up until you're already past the point of recovery.
Three questions that prevent credit card fraud
When did you last review your credit card controls, and whether they’re sufficient for current business needs?
Do you know your exception rate and average detection time lag? If a pattern of off-policy spend started today, how long before your card program would surface it?
Is your card program generating usable data about who is in or out of compliance?
Construction spend control is specific and requires a well-designed commercial card program that does two things: prevents fraudulent transactions and produces insights to counter irregular fraud.
When indirect costs default to G&A instead of being correctly allocated to specific jobs, the job's costs are understated and the G&A line inflates simultaneously. The distortion runs in both directions, and it doesn't show up until you're already past the point of recovery.
